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

"Relevant interests" of persons related to UK resident companies

Section 371OD ensures that where a UK resident company and a connected non-UK resident person both hold interests in a CFC, the UK resident company's interest takes priority as the "relevant interest", preventing double-counting.

• Where a UK resident company (UKRC) has a relevant interest in a CFC, any connected or associated non-UK resident person is a "related person" whose interest in the CFC is also normally a relevant interest.
• However, if the related person's interest is only an indirect one held through UKRC or another related person, that interest is excluded from being a relevant interest.
• Similarly, if UKRC's own interest in the CFC arises because UKRC holds an interest in the related person, the related person's interest is excluded from being a relevant interest.
• The overall effect is that the UK resident company's relevant interest always takes priority, avoiding duplication where interests overlap through connected ownership chains.