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HMRC internal manual

International Manual

Controlled Foreign Companies: Computation of Chargeable Profits and Creditable Tax: Majority interest

ICTA88/SCH24/PARA4(3) and (4)

A United Kingdom resident company has a majority interest in a controlled foreign company for an accounting period if more than half of the chargeable profits for that period which give rise to a liability under ICTA88/S747(4)(a) are apportioned to it. If no single company has a majority interest, any combination of companies which satisfies the above criterion is treated as together having a majority interest.


If chargeable profits of £200,000 are apportioned £30,000 each to A, B and C and £15,000 to D (all UK resident companies) and £95,000 to E (non-resident) assessments will be made only on A, B and C. No assessment is made on D because of ICTA88/S747(5). No single company has a majority interest (each of A, B, and C being apportioned £30,000 of the £90,000 giving rise to assessments) but A and B, or A and C, or B and C, together have a majority interest and may, therefore, give notice under ICTA88/SCH25/PARA4(2).

The company or companies entitled to give notice to an officer of the Board under ICTA88/SCH25/PARA4(2) disclaiming reliefs for a particular accounting period are those holding the majority interest for that period.