International - Controlled Foreign Companies

Like other major industrialised countries, the UK has Controlled Foreign Company (CFC) rules to stop multinationals from avoiding UK tax by diverting profits to tax havens and preferential regimes. The rules contain a motive test to ensure that CFC tax is only ever payable if a company is involved in UK tax avoidance.

Guidance on the application of the CFC rules can be found in the International Manual. This guidance has been written for Revenue staff and incorporates the CTSA Guidance Notes on the Provisions of Part XVII Chapter IV ICTA 1988, the Motive Test Guidance published in March 2003 and guidance on provisions relating to CFCs in recent Finance Acts, up to and including FA2003.

If, at any time, companies or their advisers need further guidance on particular cases, Revenue Policy, International, will be glad to provide it wherever possible. Guidance will not, of course, be given where it is sought with a view to facilitating tax avoidance. All correspondence with Revenue Policy, International, on CFC matters should be addressed to:

Revenue Policy International Registry
100 Parliament Street
London
SW1A 2BQ