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

Variable shareholdings

Section 371QF explains how to calculate a relevant person's shareholding percentage in a controlled foreign company (CFC) when that percentage changes during the accounting period.

• Where a relevant person's percentage shareholding in a CFC varies during the accounting period, a time-weighted average must be calculated rather than using a single figure.
• The accounting period is divided into "holding periods" — each being a stretch of time during which the shareholding percentage stays the same.
• For each holding period, a "relevant percentage" is calculated by multiplying the actual shareholding percentage by the number of days in that holding period, divided by the total number of days in the accounting period.
• The overall shareholding percentage for the accounting period is the sum of the relevant percentages for all holding periods.