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

Accounting periods

Section 371VB sets out the rules for determining when accounting periods of a controlled foreign company (CFC) begin and end, and gives HMRC officers the power to specify accounting periods where there is uncertainty.

• A CFC's accounting period begins either when the company first becomes a CFC or immediately after the end of its previous accounting period if it remains a CFC.
• An accounting period ends when the CFC loses its CFC status, changes its tax residence, loses all income sources, or when a company with a relevant interest loses that interest or leaves the UK corporation tax charge.
• The general corporation tax rules on accounting periods (from CTA 2009) also apply alongside these CFC-specific rules, including the rule that an accounting period cannot exceed 12 months.
• Where there is uncertainty about when a CFC's accounting period begins or ends, an HMRC officer may issue a notice specifying the accounting period, and must amend that notice if new facts reveal the specified period was incorrect.