Taxation (International and Other Provisions) Act 2010

179 Compensating payment if advantaged person is controlled foreign company

(1) Subsection (2) applies if—

(a) the actual provision is provision made or imposed in relation to a controlled foreign company,

(b) in determining for the purposes of Chapter 4 of Part 17 of ICTA the amount of that company’s chargeable profits for an accounting period, its profits and losses are to be calculated in accordance with section 147(3) or (5) in the case of that provision,

(c) the whole of those chargeable profits are to be apportioned under section 747(3) of ICTA to one or more companies resident in the United Kingdom, and

(d) tax is chargeable under section 747(4) of ICTA in respect of the whole of those chargeable profits, as so apportioned to those companies.

(2) Sections 174 to 178 have effect as if the controlled foreign company were a person on whom a potential advantage in relation to United Kingdom taxation were conferred by the actual provision.

(3) In applying sections 174 to 178 in a case in which they apply because of subsection (2)—

(a) references to the advantaged person in sections 176(3)(a) and (b) and 177(2), (3) and (4)(b) include a reference to any of the companies mentioned in subsection (1)(c), and

(b) references to corporation tax include a reference to tax chargeable under section 747(4) of ICTA.

(4) In this section—

• “controlled foreign company” has the same meaning as in Chapter 4 of Part 17 of ICTA, and

• “accounting period”, in relation to a controlled foreign company, has the same meaning as in that Chapter.