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HMRC internal manual

International Manual

Controlled Foreign Companies: How the corporate tax regime works for CFCs: How to complete the CFC supplementary pages

The following information is required on the supplementary page

  1. Name of CFC

The Roman alphabet should be used.

  1. Territory of residence

The territory of residence required is the territory determined under TIOPA10/Part 9A/Chapter 20 (INTM242000).

  1. Exemptions due (if any)

Exemptions should be entered here.

These are where:

  1. profits of the CFC have been excluded from charge because none of Chapters 4 to 8 apply (identified by noting ‘Gateway Chapter 3’ in column C) - INTM197000 
  2. profits of the CFC have been excluded from charge because, although one or more of Chapters 4 to 8 need to be considered, no chargeable profits arise (identified by noting the relevant Chapter number from 4 to 8 in column C) - INTM200000, INTM203000, INTM207000, INTM210000 and INTM213000.
  3. profits from qualifying loan relationships are fully exempt under Chapters 9 (identified by noting ‘Chapter 9’ in column C) - INTM218700 
  4. the CFC is exempted by the Exempt Period Exemption or the Low Profits Exemption (identified by noting the relevant exemption in column C) - INTM224100, INTM225500. There is no need to make a return if a CFC satisfies the Tax Exemption, the Excluded Territories Exemption or the Low Profits Margin Exemption.

If there will be no CFC charge by virtue of Chapters 3 to 8 or an exemption applies, there is no need to complete columns D to J of the supplementary return for the CFC.

  1. The measure of apportionment

In most cases this will be the percentage of ordinary shares held directly or indirectly in the CFC (INTM233000 to INTM233200). Where relevant interests are held directly or indirectly other than through ordinary shares the appropriate percentage should be calculated on a just and reasonable basis (INTM194500). (The percentage should not include the interest of any connected or associated person although that figure should be taken into account in ascertaining whether the interest is 25% or more (see INTM227000)

  1. Chargeable profits

These are the profits that pass through the CFC charge gateway in Chapters 3 to 8 calculated in accordance with TIOPA10/S371BA (INTM194000). Profits subject to a charge under Chapter 5 (INTM203000) may be wholly or partially exempted by Chapter 9 (INTM216000) on the making of a claim in the tax return.

  1. Tax on chargeable profits.

The tax on chargeable profits is the amount of tax (the CFC charge - INTM194100) due in respect of the chargeable company’s share of the CFC’s chargeable profits before relief is given under TIOPA10/S371UD (INTM245400).

  1. Creditable Tax.

The figure to be entered here is the figure of creditable tax (INTM230000) on the chargeable profits shown at box E.

  1. Reliefs in terms of tax.

Reliefs available under TIOPA10/S371UD (INTM245400) are to be shown here in terms of tax.

  1. Unrelieved surplus ACT as restricted

Unrelieved surplus ACT which is available should be shown here.

  1. CFC charge due

Box J13 should include the total of the CFC charge due in column J.