Controlled Foreign companies: Entity Exemptions: Chapter 10 - The Exempt Period Exemption: The basic rule
The exempt period exemption applies for a CFC’s accounting period if the following conditions are met
- the CFC’s accounting period ends during an exempt period (as defined by TIOPA10/Ss371JC and 371JD),
- the subsequent period condition (set out in TIOPA10/S371JB(2)) is met, and
- the chargeable company condition (set out in TIOPA10/S371JB(3)) is met.
It is possible that a CFC may have more than one exempt period over time. The exemption is however subject to an anti-avoidance rule (see INTM224350).