Skip navigation |

Controlled Foreign Company (CFC) Reform - CIOT comments

The CIOT comments, sent to HM Treasury on 22 September 2011, on their consultation which includes detailed proposals for how the new CFC regime will operate.

Our submission and the consultation document to which it refers are available here in Adobe (pdf) format.


This consultation builds on the CFC proposals included in the November consultation ( and the interim improvements introduced in Finance Bill 2011, to bring together the various changes into a modernised CFC regime.

The Government says it has decided to publish as much detail as possible now to allow sufficient time to consult further on design of the new regime ahead of publication of draft legislation in autumn 2011.

It fleshes out the details of the proposals for finance companies and the treatment of intellectual property. It aims to 'improve the competiveness of the UK corporate tax system and protect the UK tax base against avoidance'. It is, however, far from simple. The proposals include some lengthy tests which will be difficult to apply satisfactorily in practice. A critical part of the proposals will be how well the HMRC clearance procedure operates. It is also not immediately clear that the proposals are compliant with EU law as they target profits 'artificially diverted' from the UK.

Technical Team

22 September 2011


We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on the The Chartered Institute of Taxation website. To find out more about the cookies, see our privacy policy.