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HMRC internal manual

International Manual

Controlled Foreign Companies: The CFC Charge Gateway Chapter 9 - Exemptions for profits from Qualifying Loan Relationships: Claims

TIOPA10/Part 9A/S371IJ provides that a Chapter 9 claim must be made in the UK chargeable company’s tax return for the period and sets out the time limits for the claim and for varying or withdrawing that claim. In practice the claim will be made in the corporation tax computation supporting the return rather than on the face of the return itself.

The claim should make it clear how much profit is being exempted, ie the profit before relief is claimed, as well as the profit after the claim.

A later claim may be made, varied or withdrawn if allowed by an Officer of Revenue and Customs.

A claim may also be varied or withdrawn outside of the usual time limits where there are changes to the amounts used within the tests at TIOPA10/S371IE.

  • For periods before 1 April 2017 (and also subject to transitional provisions) those are changes to the tested income amounts and tested expense amounts; and
  • For periods on or after 1 April 2017 those are changes to the aggregate net tax-interest expense;

Provided that in either case the claim is made within 12 months of such a change and the claim is made to take account of that change (and not for another purpose).

Only one claim per company is required so full and partial exemption claims are made in respect of the company at the same time.

Late Claims {#}

Where there is a late claim (including the amendment or withdrawal of a claim) under TIOPA10\S371IJ(5) it should be dealt with in accordance with the guidance at Statement of Practice SP5/01 (reproduced at CTM97060). While this does not specifically refer to CFCs the approach is a general one that HMRC will adopt to extending time limits for making claims under TIOPA10\S371IJ(5).

Once the facts have been established, the case should be referred to the CFC Team in the BAI Base Protection Policy Team {#} before the claim is accepted or refused.