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

HMRC internal manual

International Manual

How the corporate tax regime works for Controlled Foreign Companies: Clearances: standard clearance letter

Dear Sirs

Low-Taxed LTD

Y PLC

Controlled foreign company clearance application 

I refer to your clearance application dated [ ] and subsequent correspondence in relation to the applicability of the controlled foreign company legislation to [the above mentioned non-resident company]. I can confirm that, on the basis of the information you have supplied in support of the application, it is HM Revenue & Customs’ view that no charge will arise under s747 ICTA 1988 on [the United Kingdom corporate interest(s)] in respect of [the potential controlled foreign company from the accounting period beginning] because [it passes the motive test, your company has no apportionable interest etc].

While no charge will arise, the requirements of Schedule 18 FA 1998 will still apply in respect of the requirement to return details of all Controlled Foreign Companies in which [the United Kingdom company] holds a relevant interest of 25% or more and which is not exempt under the Excluded Countries Regulations. If [the above controlled foreign company] is listed on your return please also note the reference number above on the controlled foreign company supplementary page to the return. A copy of this letter will be sent to the Inspector responsible for examining [the United Kingdom interest holder(s)] return.

The clearance will apply so long as the relevant facts and circumstances you have described remain the same and there are no changes to the relevant legislation. [The United Kingdom interest holder] should notify their Inspector of Taxes if there are any material changes in the facts or projections described in the application which may have a bearing on the continued application of the clearance. Failure to do so may render Company X liable to penalties under Paragraph 1 Schedule 24 Finance Act 2007 if a return is submitted which relies on a clearance which, because of significant changes in the facts or the law, is no longer appropriate.

Yours faithfully

A.N. Officer of HMRC