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

Adjustment of profits passing through the CFC charge gateway

Section 371JE deals with the adjustment of a controlled foreign company's chargeable profits where its accounting period overlaps with, but extends beyond, an exempt period.

• Applies where a CFC's accounting period starts during an exempt period but does not end within that exempt period
• Both the subsequent period condition and the chargeable company condition must be met for the section to apply
• Profits arising during the exempt portion of the accounting period must be excluded from the CFC charge on a just and reasonable basis
• The adjustment is subject to the anti-avoidance rule in section 371JF