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HMRC internal manual

International Manual

HM Revenue & Customs
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Controlled Foreign Companies: exemptions - de minimis

This guidance applies for accounting period before 1 January 2013 and refers to the legislation at Chapter IV Part XVII of the Income and Corporation Taxes Acts 1988, under the old Controlled Foreign Companies (CFC) rules.

The current rules for CFCs are contained in Part 9A, Taxation (International and Other Provisions) Act 2010. This legislation is effective for accounting periods of CFCs beginning on or after 1 January 2013. The new guidance can be found at INTM190000 onwards.

The de minimis exemption


Under ICTA88/S748(1)(d) no apportionment is due in respect of an accounting period of a controlled foreign company in which its chargeable profits do not exceed £50,000. If the accounting period is less than twelve months the amount of £50,000 is proportionally reduced. An apportionment will be due, if none of the exemptions applies, regardless of however small the amount by which the de minimis limit is exceeded.