HMRC internal manual

International Manual

INTM200810 - Controlled Foreign Companies: The CFC Charge Gateway: Chapter 4 - Profits attributable to UK activities: Exclusions - Trading profits: Business premises condition


The business premises condition requires the CFC to have a physical presence in its territory of residence. This is intended to prevent “brass plate” arrangements from benefitting from the conditions for exclusion.

The business premises in the territory have to be in use by the business with a reasonable degree of permanence, or at least be intended to be used in this way in the future. A “reasonable degree of permanence” can be taken for these purposes to mean business premises that will be used for at least 12 months.

In addition, those premises need to be the place from which the CFC’s activities in that territory are mainly carried on - it needs to be the main place of business in that territory of residence.