Does your UK resident business hold a controlling interest in an
overseas group with controlled foreign companies? If so, and the
business acts as a UK holding company, it may be able to benefit
from partial (75%) or full exemption from UK CFC tax charges on
certain non-trade finance profits.
Background
The UK has recently updated its controlled foreign company (CFC)
regime so that it is more clearly focussed on artificial diversion
of profits from the UK. The reform has also introduced the ability
to ensure that certain overseas finance profits can be accumulated
subject to a UK tax rate of 25% of the normal corporation tax rate
or be fully exempt. This latter feature is an attractive tax
consideration for locating a holding company structure in the
UK.
