Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

International Manual

Controlled Foreign Companies: exemptions - the motive test: Contents

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.

  1. INTM255160
    Introduction to the motive test
  2. INTM255170
    The conditions of the motive test
  3. INTM255180
      transactions reducing United Kingdom tax
  4. INTM255190
      statutory definition
  5. INTM255200
    are the results of the transaction(s) reflected in the controlled foreign company's profits for the accounting period?
  6. INTM255210
      reduction in United Kingdom tax?
  7. INTM255220
      reduction in United Kingdom tax more than minimal?
  8. INTM255230
    The transaction leg of the motive test: motive element
  9. INTM255240
    The diversion of profits leg of the motive test
  10. INTM255250
      statutory definition
  11. INTM255260
    are there receipts reflected in the controlled foreign company's profits for an accounting period?
  12. INTM255270
    Controlled Foreign Companies: exemptions - the motive test: The diversion of profits leg of the motive test: would it be reasonable to suppose that the whole or a substantial part of the receipts would have been received by a United Kingdom person?
  13. INTM255280
    related company
  14. INTM255290
      United Kingdom company
  15. INTM255300
      would the United Kingdom person have paid more, or been entitled to less relief from, united Kingdom tax?
  16. INTM255310
    motive element
  17. INTM255320
    Application of motive test: overview
  18. INTM255330
    Application of motive test: 'marginal and isolated failure' of exempt activities and excluded countries exemptions
  19. INTM255340
    Application of motive test: newly-established overseas business
  20. INTM255350
    Application of motive test: incorporation of foreign branch
  21. INTM255360
    Application of motive test: United Kingdom takeover of overseas group - 'period of grace'
  22. INTM255370
    Application of motive test: background
  23. INTM255380
    Application of motive test: 21 March 2000 example
  24. INTM255390
    Application of motive test: avoidance of United Kingdom or foreign tax
  25. INTM255400
    Application of motive test: conduit companies
  26. INTM255410
    Application of motive test: Venture Capital Limited Partnerships
  27. INTM255420
    Application of motive test: loan relationships legislation
  28. INTM255430
    Application of motive test: examples - 'marginal and isolated failure' of exempt activities and excluded countries exemptions
  29. INTM255430
    Application of motive test: examples - 'marginal and isolated failure' of exempt activities and excluded countries exemptions
  30. INTM255440
    Application of motive test: examples - United Kingdom takeover of overseas group
  31. INTM255450
    Application of motive test: examples - locally based traders failing the exempt activities test
  32. INTM255460
    Application of motive test: examples - intra-group service providers failing the exempt activities test
  33. INTM255470
    Application of motive test: examples - controlled foreign company's profits effectively subject to tax in the United Kingdom
  34. INTM255480
    Application of motive test: examples - captive insurerance companies
  35. INTM255490
    Application of motive test: examples - 'money boxes'
  36. INTM255500
    Application of motive test: examples - holding companies