INTM215420 - Controlled Foreign Companies: before CTSA

Assessment: alternative rights of recovery

ICTA88/S754 (6) to (8)

A company may be the 'assessable company' under ICTA88/S752 (6) - see INTM215320. It may fail to pay all or part of the Chapter IV tax before the date on which it is due and payable. If so, there are alternative rights of recovery.

In these cases the Board can serve a notice of liability on another company. The Act calls this the 'responsible company'. This company must be resident in the United Kingdom. It must also hold, or have held, the same interest in the controlled foreign company as the assessable company holds, or held.

The responsible company must pay the tax unpaid by the assessable company. It must pay interest on the unpaid tax, as well. This is so whether the interest accrues before or after the date of the notice. If the responsible company does not pay the tax and interest within three months of the notice of liability the HM Revenue & Customs can recover the tax and interest from the assessable company. This does not prejudice the right of recovery from the responsible company.