30(1)Paragraph 6 of Schedule 25 to the Taxes Act 1988 (exemption for controlled foreign companies engaged in exempt activities) shall be amended as follows.U.K.
(2)In sub-paragraph (1)(c) (which provides that for a company to be engaged in exempt activities, any of sub-paragraphs (2) to (4) must apply) for “(4)" there shall be substituted “ (4A) ”.
(3)In sub-paragraph (2)(b) (which in certain cases requires less than 50 per cent. of gross trading receipts to be derived from connected or associated persons or persons who have an interest in the company at any time during the accounting period) for “an interest in the company at any time during" there shall be substituted “ a 25 per cent. assessable interest in the company in the case of ”.
(4)In sub-paragraph (3) (local holding companies) in paragraph (b) (controlled companies which are not themselves holding companies but which are otherwise engaged in exempt activities)—
F1(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)after “exempt activities" there shall be inserted “ or are, in terms of sub-paragraph (5A) below, exempt trading companies ”.
F2(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)After sub-paragraph (4B) there shall be inserted—
“(4C)For the purposes of sub-paragraph (2)(b) above, a person has a 25 per cent. assessable interest in a controlled foreign company in the case of an accounting period of the company if, on an apportionment of the chargeable profits and creditable tax (if any) of the company for that accounting period under section 747(3), at least 25 per cent. of the controlled foreign company’s chargeable profits for the accounting period would be apportioned to that person.”
F4(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9)After sub-paragraph (5) there shall be inserted—
“(5A)For the purposes of sub-paragraphs (3) to (4B) above, a company is an exempt trading company throughout any period if—
(a)it is a trading company throughout each of its accounting periods which falls wholly or partly within that period; and
(b)each of those accounting periods is one as regards which—
(i)the condition in section 747(1)(c) is not satisfied; or
(ii)the conditions in section 748(1)(e) are satisfied; or
(iii)the conditions in section 748(3)(a) and (b) are satisfied.”
Textual Amendments
F1Sch. 17 para. 30(4)(a) omitted (with effect in accordance with Sch. 16 para. 12 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 16 para. 11(a) (with Sch. 16 paras. 13-20)
F2Sch. 17 para. 30(5) omitted (with effect in accordance with Sch. 16 para. 12 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 16 para. 11(a) (with Sch. 16 paras. 13-20)
F3Sch. 17 para. 30(6) omitted (with effect in accordance with Sch. 16 para. 12 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 16 para. 11(a) (with Sch. 16 paras. 13-20)
F4Sch. 17 para. 30(8) omitted (with effect in accordance with Sch. 16 para. 12 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 16 para. 11(a) (with Sch. 16 paras. 13-20)