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HMRC internal manual

International Manual

Controlled Foreign Companies: legislation - introduction and outline: Apportionment of profits

The chargeable profits and creditable tax of the controlled foreign company must be apportioned among the persons (whether resident in the United Kingdom or not) who had an interest in the controlled foreign company at any time during the accounting period under consideration. The basis on which the apportionment must be made broadly follows the interests held in the controlled foreign company. Further guidance on apportionment is given in INTM255860.

The definition of a person having an ‘interest’ in a controlled foreign company includes shareholders and also, for example, persons who control the company, who participate in distributions or who have power to enjoy the company’s assets or income. Further details of the definition of the persons having an ‘interest’ are in INTM255890.