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

Does Chapter 4 apply?

Section 371CA sets out the four conditions (A to D) under which Chapter 4 (profits attributable to UK activities) will not apply to a controlled foreign company's accounting period.

• Chapter 4 applies by default unless the CFC meets at least one of four exempting conditions (A, B, C or D)
• Conditions A and B provide exemptions where the CFC's assets and risks are not linked to UK tax-motivated arrangements or are not managed from the UK
• Condition C provides an exemption where the CFC has its own capability to run its business commercially without relying on UK-based management of its assets and risks
• Condition D provides an exemption where the CFC's profits consist solely of non-trading finance profits, property business profits, or a combination of both