Taxation (International and Other Provisions) Act 2010 section 371BE

Companies which are managers of offshore funds etc

Section 371BE provides an exemption from the CFC charge for UK companies that manage offshore funds and hold a "seed" investment in those funds, provided four conditions are met.

• A UK company that manages an offshore fund and holds a seed investment in it can be excluded from the CFC charge if the fund meets the genuine diversity of ownership condition
• The company must manage the fund's assets (or a connected person must do so), receive management fees, and hold its interest mainly to attract unconnected investors
• The maximum CFC charge that would otherwise fall on the company must be no more than £500,000 for a full 12-month accounting period
• Where the accounting period is shorter than 12 months, the £500,000 threshold is reduced proportionately