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

Capital investment from the UK

Section 371EC brings into the CFC charge gateway any non-trading finance profits of a controlled foreign company that arise from the investment of funds or assets originating from UK sources.

• Non-trading finance profits arising from funds or assets that can be traced back to UK connected companies fall within the CFC charge
• An additional deduction is allowed where the CFC manages funds itself, representing the difference between actual management costs and what an arm's length fee would have been
• "Relevant UK funds or other assets" covers capital contributions, previously charged CFC profits, transfer pricing adjustments, and other assets received from UK connected companies (excluding payment for goods/services or loans)
• A "UK connected company" includes both UK resident companies connected with the CFC and non-UK resident companies connected with the CFC that operate through a UK permanent establishment