Schedule 12 - Controlled foreign companies

Part of Finance (No. 3) Bill – in a Public Bill Committee at 11:45 am on 7th June 2011.

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Amendments made: 118, in schedule 12, page 189, leave out lines 8 to 13 and insert—

15B (1) An exempt period begins in relation to a company (“X”) at a time (“the relevant time”) when—

(a) X is resident outside the United Kingdom,

(b) X is controlled by persons resident in the United Kingdom,

(c) there is at least one relevant UK corporate investor in X, and

(d) the requirements of paragraph 15C or 15D are met.

(2) There is a “relevant UK corporate investor in X” at a particular time if, at that time, there is a company which—

(a) is resident in the United Kingdom, and

(b) would, on the assumptions set out in sub-paragraph (3), be a company to which an apportionment of X’s chargeable profits for the relevant accounting period would fall to be made in circumstances where section 747(5) would not prevent tax being chargeable on the company under section 747(4).

(3) The assumptions are—

(a) X has chargeable profits for the relevant accounting period,

(b) an apportionment of those profits falls to be made under section 747(3) for that period, and

(c) no reduction of those profits arises under section 751A, 751AA or 751AB.

(4) “The relevant accounting period” means the accounting period of X in which the time mentioned in sub-paragraph (2) falls.

15C (1) The requirements of this paragraph are that—

(a) no company was, at any time before the relevant time, a relevant UK corporate investor in X,’.

Amendment 119, in schedule 12, page 189, line 17, leave out ‘such control’ and insert ‘the control of persons resident in the United Kingdom’.

Amendment 120, in schedule 12, page 190, leave out lines 16 to 19 and insert—

‘(c) no company was, at any time during that accounting period, a relevant UK corporate investor in X,

(d) no company was, immediately before the relevant time, a relevant UK corporate investor in X,’.

Amendment 121, schedule 12, page 190, line 26, at end insert—

‘(2) In determining for the purposes of sub-paragraph (1)(e)(ii) whether a company is under the control of two or more bodies corporate taken together, a body corporate which holds less than 10% of the issued ordinary shares of that company is to be disregarded.

(3) For the purposes of sub-paragraph (2), a body corporate is treated as holding any shares held by persons who are connected or associated with the body corporate.’.

Amendment 122, in schedule 12, page 192, line 14, at end insert—

‘“relevant UK corporate investor in X” has the meaning given by paragraph 15B(2);’.—(Mr Gauke.)