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HMRC internal manual

International Manual

Controlled Foreign Companies: Computation of Chargeable Profits and Creditable Tax: Unremittable income

ICTA88/SCH24/PARA12

Relief under CTA09/S1275 (relief for unremittable overseas income) is in principle available to a foreign company in the computation of its chargeable profits in respect of certain unremittable income. Entitlement to relief is based on a claim and the maximum benefit is available under ICTA88/SCH24/PARA4(1) (see INTM255690).

The operation of CTA09/S1275 is restricted for the purposes of Chapter IV. Income qualifies for relief only if it is unremittable neither -

  • to the United Kingdom, nor
  • to the overseas company’s territory of residence (see INTM254400).

It follows that income arising in the company’s territory of residence can never be excluded from chargeable profits regardless of whether it can be remitted to the United Kingdom.

When the income becomes remittable it must be added back to the chargeable profits of the overseas company.