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

Provision about interpretation

Section 371QB defines key terms used in Chapter 17, which deals with how a controlled foreign company's chargeable profit and creditable tax are apportioned among those with interests in it.

• The interpretation rules from Chapter 15 (covering direct and indirect interests in a company, and interests held through trusts) also apply to Chapter 17.
• "Ordinary shares" means shares of a single class that is the only class issued by the company; shares paid up to different amounts are treated as belonging to different classes, and fractions of a share count as shares.
• A person holds ordinary shares in a CFC "indirectly" if they directly hold ordinary shares in a company that is "share-linked" to the CFC.
• A company is "share-linked" to a CFC if its only interest in the CFC arises from holding ordinary shares in the CFC itself, or ordinary shares in another company that is share-linked to the CFC, forming a chain of ordinary-share ownership.