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

What is "the threshold amount"?

Section 371KD defines the threshold amount used to determine whether certain categories of income fall within acceptable limits for a controlled foreign company (CFC) to qualify for the exempt trade exemption (ETE).

• The threshold amount is the higher of 10% of the CFC's accounting profits for the period, or £50,000
• For accounting periods shorter than 12 months, the £50,000 figure is reduced proportionately
• Accounting profits are calculated without transfer pricing adjustments
• Where income falls into more than one category, it is counted only once for the purposes of the threshold test