Section 371JC | When does an exempt period begin? ^F1

(1)An exempt period of a CFC begins at any time (“the relevant time”) during an accounting period of the CFC if—

(a)the initial condition is met,

(b)the charging condition is met at the relevant time, and

(c)at no time during the relevant preceding period (if there is one) is the charging condition met.

(2)The initial condition is met if—

(a)immediately before the relevant time, the company (“C”) which is the CFC is carrying on a business, or

(b)if the relevant time is the time at which C is incorporated or formed, C is incorporated or formed by one or more persons for the purpose of controlling one or more companies in circumstances where it is expected that an exempt period will begin in relation to one or more of those companies when C begins to control the company or companies.

(3)To determine if the charging condition is met at any time, assume—

(a)that the company which is the CFC is a CFC at the time in question if that is not otherwise the case,

(b)that the time in question is itself an accounting period of the CFC, and

(c)that section 371BC (charging the CFC charge) applies in relation to the assumed accounting period.

(4)The charging condition is met at the time in question if, as a result of steps 1, 3 and 4 in section 371BC(1), there would be one or more chargeable companies in relation to the assumed accounting period.

(5)“The relevant preceding period” means the period of 12 months ending immediately before the relevant time, excluding any part of that period during which the company which is the CFC does not exist.