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Can anyone explain the five conditions on how the CFC apportionment can be avoided in simple terms.
I don’t understand them from the Kaplan study text.
Thank you
CFC profits will be exempt if the following conditions arise
1. It has been acquired within 12 months
2. Profits less than £500,000 of which less than £50,000 is non trading
3. Tax suffered abroad is 75% or greater of UK tax
4. Something to do with the company being able to survive if it didn’t have any control in the UK
5. ???Controlled Foreign Companies
Companies controlled by UK resident persons and they operate in low tax countries to avoid tax.exemptions from BPP pass cards
1. Exempt period (first 12 months if restructure not within charge)
so first 12 months they are exempted from tax2. Excluded territories (which are not low tax territories)
obviously they can not avoid tax3. Low profits <50000 in total or <500000 in total and <50000 non trading
they are not there for tax avoidance, this is petty amount4. low profit margin ,10% of relevant operating expenditure.
dont get this any one explain?5. tax exemption (tax paid in overseas territory >75% UK corporation tax.)
They have paid substantial tax over seas so exempt from uk tax, (little in doubt, what you say guys?)
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