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GLOSSARY

Controlled foreign company (CFC) definition

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What does Controlled foreign company (CFC) mean?

A company that is: • resident outside the UK for tax purposes, and • controlled by a person or persons resident in the UK The controlled foreign company legislation is in Part 9A to the Taxation (International and Other Provisions) Act 2010. See: INTM191100.

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Foreign branch exemption—foreign permanent establishments amount

Foreign branch exemption—foreign permanent establishments amount As explained in Practice Note: Foreign branch exemption—structure of the foreign branch exemption, the concept of the foreign permanent establishments amount (FPEA) is the key determining factor in how much profit is exempted from UK tax by the foreign branch exemption. This is because, where an election is in effect, any profit or loss taken into account in arriving at the FPEA must be left out of account (by making appropriate ‘exemption adjustments’) in calculating the company's taxable total profits. Exceptions There are two significant exceptions to the rules, discussed in turn below. Dealing in or developing UK land First, in order to counteract certain structures utilising foreign permanent establishments (PE), UK profits and losses of a company's trade of dealing in or developing UK land are not to be left out of account for the purposes of calculating a company’s profits subject to corporation tax —ie the foreign branch exemption does not apply to such UK profits and losses from a...

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