INTM254180 | Controlled Foreign Companies: legislation - introduction and outline: Requirements of the legislation

The general scheme of the legislation requires:

• a computation of the profits (exclusive of capital gains) of a controlled foreign company for an accounting period, broadly on the lines of Corporation Tax profits,

• an apportionment of the profits among those with an interest in the company, then

• self assessment to tax by all United Kingdom companies to which 25% or more of the profits have fallen to be apportioned. (Amounts apportioned to associates are taken into account in calculating whether the 25% threshold is passed, but not in calculating the amount of tax due.)