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HMRC internal manual

International Manual

Controlled Foreign Companies: The CFC Charge Gateway Chapter 3 - Determining which (if any) of Chapters 4 to 8 apply: Does Chapter 7 apply?

Does Chapter 7 apply? (TIOPA10/S371CF)

Chapter 7 (captive insurance business) applies for a CFC’s accounting period only if at any time during that period the main part of the CFC’s business is insurance business, and its assumed total profits include amounts derived (directly or indirectly) from contracts of insurance entered into with:

  • A UK resident company connected with the CFC;
  • A non-UK resident company connected with the CFC and acting through a UK permanent establishment; or
  • A UK resident person where the contract is linked (directly or indirectly) to the provision of goods or services to the UK resident person by a UK connected company. This excludes services provided as part of insurance business.

If Chapter 7 applies see INTM210000 for further guidance on how to calculate the chargeable profits.