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HMRC internal manual

International Manual

HM Revenue & Customs
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Controlled Foreign Companies: The CFC Charge Gateway Chapter 3 - Determining which (if any) of Chapters 4 to 8 apply: Does Chapter 4 apply?: Conditions A to D: contents

Conditions A to D (TIOPA10/S371CA)

If one or more of Conditions A to D are met by a CFC, then Chapter 4 does not apply to the CFC and so the relevant profits will remain outside the scope of the CFC charge. The conditions are:

INTM197310- Condition A. This is a two part test of the purpose of the arrangements by which a CFC holds assets or bears risks;

INTM197320 - Condition B. This asks whether the CFC has any assets or risks for which key management activities are in the UK;

INTM197330- Condition C. This applies if Condition B is not met (i.e. key management activities are in the UK) and asks whether the CFC would have the capability to run its business effectively, on a stand- alone basis or with third party support, without the UK management activity;

INTM197340- Condition D. This excludes CFCs that have only non-trading finance profits and/or property business profits.