SCHEDULES

SCHEDULE 28AA U.K. Provision not at arm’s length

Modifications etc. (not altering text)

C1 Sch. 28AA modified (28.7.2000) by Finance Act 2000 (c. 17), Sch. 22 para. 58(1) (as amended by 2004 c. 12, s. 37, Sch. 5 para. 12) (with Sch. 22 para. 58(3))

C2 Sch. 28AA applied (with modifications) (28.7.2000) by Finance Act 2000 (c. 17), Sch. 22 para. 59(1)(2) (as amended by 2004 c. 12, s. 37, Sch. 5 para. 13) (with Sch. 22 para. 59(4))

C3 Sch. 28AA applied by Finance Act 1996 (c. 8), s. 100 (as substituted (with effect in accordance with s. 79(3) of the 2002 amending Act) by Finance Act 2002 (c. 23), Sch. 23 para. 6 (with s. 81(4)(5), Sch. 23 para. 25))

C4 Sch. 28AA modified by Finance Act 1996 (c. 8), Sch. 9 para. 11A(1) (as inserted (with effect in accordance with s. 79(3) of the 2002 amending Act) by Finance Act 2002 (c. 23), Sch. 23 para. 11 (with s. 81(4)(5), Sch. 23 para. 25))

Valid from 22/07/2004

Compensating adjustment where advantaged person is a controlled foreign company U.K.

6B (1) This paragraph applies in any case where—

(a) the actual provision is provision made or imposed in relation to a controlled foreign company,

(b) in determining for the purposes of Chapter 4 of Part 17 the amount of that company’s chargeable profits for an accounting period, its profits and losses fall to be computed in accordance with paragraph 1(2) above in the case of that provision,

(c) the whole of those chargeable profits fall to be apportioned under section 747(3) to one or more companies resident in the United Kingdom, and

(d) tax is chargeable by virtue of section 747(4) in respect of the whole of those chargeable profits, as so apportioned to those companies.

(2) Where this paragraph applies, paragraph 6 above shall have effect as if the controlled foreign company were a person on whom a potential advantage in relation to United Kingdom taxation were conferred by the actual provision.

(3) In the application of paragraph 6 above by virtue of this paragraph—

(a) references to the advantaged person in sub-paragraphs (4)(a) and (b), (5)(a) and (b) and (6)(b) of that paragraph include a reference to any of the companies mentioned in sub-paragraph (1)(c) above, and

(b) references to corporation tax include a reference to tax chargeable by virtue of section 747(4).

(4) In this paragraph—

• “controlled foreign company” has the same meaning as in Chapter 4 of Part 17;

• “accounting period”, in relation to a controlled foreign company, has the same meaning as in Chapter 4 of Part 17.