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

Cell companies etc.

Section 371VE explains how the controlled foreign companies rules apply to cell companies, treating both unincorporated and incorporated cells as if they were separate non-UK resident companies in their own right.

• Both unincorporated cells (identifiable parts of a non-UK resident company with ring-fenced assets, liabilities and member rights) and incorporated cells (separate legal entities created under a non-UK resident company's constitution) are treated as non-UK resident companies for CFC purposes.
• Where a non-UK resident company contains unincorporated cells, the parent company retains its own status as a company, but its assets and liabilities must be apportioned between itself and all its unincorporated cells on a just and reasonable basis.
• An incorporated cell is an entity with its own legal personality, established under the governing documents of a non-UK resident company, which would not otherwise be classified as a company — and treating it as one does not affect the parent company's own CFC status.
• The Treasury has the power to make regulations extending these CFC rules to other specified types of company sub-divisions or non-corporate entities, and may amend the existing cell company provisions accordingly.