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HMRC internal manual

International Manual

Controlled Foreign companies: Entity Exemptions: Chapter 10 - The Exempt Period Exemption: Chargeable company condition

The chargeable company condition is met if the “charging condition” in TIOPA10/S371JC is met and throughout the “relevant period” either a company which has a relevant interest in the CFC at the beginning of the exempt period is an “original chargeable company” or is connected with an original chargeable company. The effect of this is that the availability of the exempt period exemption is not affected by a transfer of ownership of a CFC within a group if there is at least one connected UK company which could be subject to a CFC charge in respect of the new CFC rules.

The “relevant period” is the period from immediately after the beginning of the exempt period until the end of the subsequent period (i.e. the end of the first accounting period beginning after the end of the exempt period).

An “original chargeable company” is a company which would be a chargeable company at the start of the exempt period for the purposes of the charging condition set out in TIOPA10/S371JC.