INTM215360 - Controlled Foreign Companies: before CTSA

Assessment: overview

ICTA88/S754 (1)

The Board may direct that Chapter IV should apply for an accounting period of a controlled foreign company. It may in that case apportion the company's chargeable profits, etc. Where that happens, the Inspector assesses the Chapter IV tax as though it were an amount of Corporation Tax. This is under ICTA88/S747 (4)(a). For this purpose all the machinery rules that apply generally to Corporation Tax are used for Chapter IV. These include the rules for assessments and collection of tax. They also include the rules for appeals, administration, interest on unpaid tax and penalties.

The rules of the Taxes Acts for corporation tax returns do not, however, apply to Chapter IV.

The Pay and File arrangements include assessments under Chapter IV. They apply to accounting periods ending on or after 1 October 1993. Interest will run from the due and payable date. This is nine months from the end of the accounting period of the company assessed.