SCHEDULES
SCHEDULE 25F1Cases where section 747(3) does not apply
F2Part 3AExempt Periods
Sch. 25 Pt. 3A (paras. 15A-15G) inserted (with effect in accordance with Sch. 12 para. 14(2) of the amending Act) by Finance Act 2011 (c. 11), Sch. 12 para. 8
Beginning of exempt period
15B
1
An exempt period begins in relation to a company (“X”) at a time (“the relevant time”) when—
a
X is resident outside the United Kingdom,
b
X is controlled by persons resident in the United Kingdom,
c
there is at least one relevant UK corporate investor in X, and
d
the requirements of paragraph 15C or 15D are met.
2
There is a “relevant UK corporate investor in X” at a particular time if, at that time, there is a company which—
a
is resident in the United Kingdom, and
b
would, on the assumptions set out in sub-paragraph (3), be a company to which an apportionment of X's chargeable profits for the relevant accounting period would fall to be made in circumstances where section 747(5) would not prevent tax being chargeable on the company under section 747(4).
3
The assumptions are—
a
X has chargeable profits for the relevant accounting period,
b
an apportionment of those profits falls to be made under section 747(3) for that period, and
c
no reduction of those profits arises under section 751A, 751AA or 751AB.
4
“The relevant accounting period” means the accounting period of X in which the time mentioned in sub-paragraph (2) falls.
15C
1
The requirements of this paragraph are that—
a
no company was, at any time before the relevant time, a relevant UK corporate investor in X,
b
no asset owned by X, or part of the business carried on by X, at the relevant time was previously owned, or carried on, by a company which—
i
was under the control of persons resident in the United Kingdom at any time it owned the asset or carried on the part of the business, and
ii
is or has been related to X,
c
condition A, B, C or D is met, and
d
no disqualifying relevant transaction occurs (see paragraph 15E).
2
Condition A is that, immediately before the relevant time, X—
a
was in existence, but
b
was not a member of the same group of companies as any person who, at the relevant time, was a controlling UK person.
3
Condition B is that—
a
at the relevant time X is controlled by a company which is resident in the United Kingdom, and
b
immediately before that time, X was controlled by that same company but that company was not then resident in the United Kingdom.
4
Condition C is that—
a
at the relevant time—
i
X is controlled by a company which is resident in the United Kingdom (“the intermediate parent”), and
ii
the intermediate parent is controlled by a company which is not resident in the United Kingdom (“the parent”), and
b
immediately before that time X was controlled by the parent but not the intermediate parent.
5
Condition D is that X—
a
is a controlled foreign company at the time it is formed, and
b
is formed by one or more persons for the purpose of controlling one or more companies in circumstances where it is expected that an exempt period will begin in relation to one or more of those companies at the time when X begins to control the company or companies.
6
In this paragraph “controlling UK person” means a person resident in the United Kingdom who alone, or together with other such persons, controls X.
15D
1
The requirements of this paragraph are that—
a
the relevant time falls after 23 March 2011,
b
X has an accounting period during which 23 March 2011 falls,
c
no company was, at any time during that accounting period, a relevant UK corporate investor in X,
d
no company was, immediately before the relevant time, a relevant UK corporate investor in X,
e
at the relevant time X is controlled by a company which—
i
is resident in the United Kingdom, and
ii
is not under the control of another body corporate, or two or more other bodies corporate taken together, and
f
no disqualifying relevant transaction occurs (see paragraph 15E).
2
In determining for the purposes of sub-paragraph (1)(e)(ii) whether a company is under the control of two or more bodies corporate taken together, a body corporate which holds less than 10% of the issued ordinary shares of that company is to be disregarded.
3
For the purposes of sub-paragraph (2), a body corporate is treated as holding any shares held by persons who are connected or associated with the body corporate.
Sch. 25 heading substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 25; S.I. 1998/3173, art. 2