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HMRC internal manual

International Manual

Controlled Foreign Companies: legislation - introduction and outline: Assessments

Where the chargeable profits of a controlled foreign company fall to be apportioned to a company resident in the United Kingdom, a self assessment must be made by the United Kingdom company on a sum equal to Corporation Tax at the appropriate rate (see INTM255860) on the apportioned profits less any creditable tax also included in the apportionment. The sum is chargeable for the accounting period of the UK company in which the controlled foreign company’s accounting period which gave rise to that sum ends. The UK company does not however have to make an assessment unless the aggregate of the chargeable profits apportioned to itself, and to any persons connected or associated with it, is at least 25% of the total chargeable profits of the controlled foreign company. The normal Corporation Tax provisions concerning collection of tax, instalments, interest on overdue tax and postponement of payment etc apply to Chapter IV assessments.