Test your understanding
(1). State whether the following statements are true or false.
A There will not be a CFC charge if the CFC does not have any chargeable profits.
B There may be a CFC charge if the CFC’s profits are £80,000.
(2). State whether the following statements are true or false.
A The tax exemption from the CFC charge applies where the tax rate in the overseas country is at least 75% of the UK rate.
B Chargeable profits consist of the income of the CFC which has been artificially diverted from the UK.
(3). JUV Ltd owns 18% of the ordinary share capital of RTB Co, a controlled foreign company.
Explain how any CFC charge levied on JUV Ltd will be calculated.
Answers
