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

Elections and designations about residence

Section 371TC sets out the rules governing how elections and designations are made to determine the territory in which a controlled foreign company (CFC) is treated as resident, including who may make an election, the procedural requirements, and how long the election or designation remains in effect.

• An election to choose a CFC's territory of residence may be made by a company (or companies acting together) to which more than half of the CFC's chargeable profits would likely be apportioned, must be filed with HMRC within 12 months of the end of the relevant accounting period, and is irrevocable once made.
• Where HMRC designates a territory of residence instead, the designation is also irrevocable, and HMRC must notify each company that would likely be subject to the CFC charge, providing details of the CFC's name, the accounting period, the designation date, and the territory designated.
• An election or designation applies to the relevant accounting period and continues for each successive accounting period of the CFC, regardless of any changes in the persons holding interests in the CFC or in the extent of those interests.
• The election or designation ceases to apply from any later accounting period in which the set of eligible territories changes — either because a previously eligible territory no longer qualifies, or because a new territory becomes eligible.