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

The 75% exemption

Section 371ID provides a partial exemption of 75% for profits from a CFC's qualifying loan relationship where the full exemption under section 371IB has not been claimed.

• This section applies to qualifying loan relationships where no claim for full exemption has been made under section 371IB.
• Where it applies, 75% of the profits from the qualifying loan relationship are exempt from a CFC charge.
• The full exemption under section 371IB may be unavailable because the loan is partly funded by new UK debt, which taints the qualifying resources.
• The 75% exemption acts as a default partial relief, ensuring that at least a significant portion of qualifying loan relationship profits escapes the CFC charge.