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HMRC internal manual

International Manual

From
HM Revenue & Customs
Updated
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Controlled Foreign Companies: apportionment of chargeable profits and creditable tax: Interests by virtue of ordinary shares alone

ICTA88/S752(2) - (3)

In the majority of cases relevant interests in a controlled foreign company will arise solely by virtue of holdings of ordinary shares either directly or via holding companies. Where all of the following requirements are met, apportionment should be made among the ‘relevant interests’ in direct proportion to the ordinary shares held in the controlled foreign company.

  • Throughout the accounting period of the controlled foreign company the relevant interest must be held directly or indirectly by virtue of ordinary shares alone.
  • Throughout the accounting period of the controlled foreign company each person holding a relevant interest must be either resident in the United Kingdom or resident outside the United Kingdom.
  • Throughout the accounting period of the controlled foreign company no company with an intermediate interest in the controlled foreign company held that interest other than via ordinary shares.