Taxation (International and Other Provisions) Act 2010 (c. 8)

[F1 PART 9A U.K. Controlled foreign companies

Textual Amendments

F1 Pt. 9A inserted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 20 para. 1 (with ss. 56-58)

Chapter 18 U.K. Control etc

371RC Legal and economic control: the 40% rule U.K.

(1) This section applies to a non-UK resident company (“C”) if—

(a) in accordance with section 371RB(7), two persons (“the controllers”) control C, and

(b) one of the controllers is UK resident and the other is non-UK resident.

(2) If conditions X and Y are met, C is to be taken to be a CFC (if C would not otherwise be).

(3) Condition X is that the UK resident controller has interests, rights and powers representing at least 40% of the holdings, rights and powers in respect of which the controllers fall to be taken as controlling C.

(4) Condition Y is that the non-UK resident controller has interests, rights and powers representing—

(a) at least 40%, but

(b) no more than 55%,

of the holdings, rights and powers in respect of which the controllers fall to be taken as controlling C.]