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HMRC internal manual

International Manual

Controlled Foreign Companies: apportionment of chargeable profits and creditable tax: Substantial interest requirement

ICTA88/S747(5) ICTA 1988

Where chargeable profits of a controlled foreign company are apportioned to a United Kingdom resident company, no assessment may be made in respect of those profits unless the aggregate of the following amounts is at least 25% of the total chargeable profits of the controlled foreign company. The amounts to be aggregated are:

  1. the amount of the chargeable profits which have been apportioned to the resident company, and
  2. the amount of the chargeable profits which have been apportioned to persons (whether corporate or individual) who are connected or associated with the resident company. (See INTM254410)