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HMRC internal manual

International Manual

From
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: What is excluded from non-trading finance profits?: Example 2

During AP1 CFC M is a holding company with three CFC subsidiaries. The total relevant non-trading finance profits of the CFC subsidiaries is 100. This is added to the non-trading finance profits of CFC M of 50 to give a total non-trading finance profits amount for CFC M of 150.

  • If the exempt distribution income of CFC M is 4000, the 5% rule is met (5% of 4000 is 200, which is more than 150).
  • If the exempt distribution income of CFC M is 2500, the 5% rule is not met (5% of 2500 is 125, which is less than 150).