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

Disapplication of assumption in section 371SF(1)

Section 371SG allows chargeable companies to override the default claims and elections that are automatically assumed when calculating a controlled foreign company's (CFC's) taxable profits, by giving notice to HMRC.

• A chargeable company can give notice to HMRC requesting that the CFC be treated as not having made, or as having made a different, claim, election or capital allowance disclaimer for the accounting period in question
• Where a valid notice is given, the CFC's assumed total profits, reliefs and creditable tax are recalculated using the alternative assumptions set out in the notice instead of the standard defaults
• The notice must be given within 20 months after the end of the relevant accounting period (or a longer period if HMRC allows), and can include claims such as rollover relief on intangible fixed assets or relief for unremittable income
• Only companies that would, individually or collectively, be apportioned more than half of the total chargeable profits allocated to all chargeable companies are entitled to give the notice

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