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

Unremittable overseas income

Section 371SN restricts when a controlled foreign company's overseas income can be treated as "unremittable" and therefore excluded from its assumed taxable total profits.

• Overseas income of a CFC can only be treated as unremittable if it cannot be transferred to the UK or to any territory where the CFC is resident.
• The "relevant territories" include the UK, the territory where the CFC is treated as resident for tax purposes, and any other territory where the CFC is actually resident during the accounting period.
• If income can be remitted to any one of these relevant territories, it cannot be excluded from the CFC's taxable profits as unremittable income.
• Income arising in a territory where the CFC is itself resident can never qualify as unremittable, even if it cannot be sent to the UK.