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

"Relevant interests" of UK resident companies

Section 371OC defines when a UK resident company's interest in a controlled foreign company (CFC) counts as a "relevant interest" and when it does not.

• A UK resident company's interest in a CFC is generally treated as a "relevant interest".
• An exception applies where the interest is held indirectly through another UK resident company.
• Where a UK company only has its CFC interest because it holds shares in another UK company that itself has the CFC interest, that indirect interest is excluded.
• This prevents the same CFC interest from being counted twice when two or more UK companies sit in a chain above the CFC.