Finance Act 1998

1 (1) Section 747 of the Taxes Act 1988 (imputation of chargeable profits and creditable tax of controlled foreign companiesimputation of chargeable profits and creditable tax of controlled foreign companies) shall be amended as follows.

(2) In subsection (1) (which provides that the provisions of the Chapter shall apply in relation to an accounting period of a company if the Board have reason to believe certain things and so direct)—

(a) the words “the Board have reason to believe that”, and

(b) the words “and the Board so direct,”,

shall cease to have effect.

(3) In subsection (3) (apportionment of controlled foreign company’s chargeable profits and creditable tax among the persons with an interest in the company) for “Where, by virtue of a direction under subsection (1) above,” there shall be substituted “Subject to section 748, where”.

(4) In subsection (4)—

(a) in paragraph (a) (which provides for a sum to be assessed on and recovered from a company resident in the United Kingdom as if it were corporation tax) for “assessed on and recoverable from” there shall be substituted “chargeable on”;

(b) in the words following paragraph (b), for “to which the direction under subsection (1) above relates” there shall be substituted “which is mentioned in subsection (1) above”.

(5) In subsection (5) (tax not to be assessed and recoverable from the resident company unless, among other things, at least 10 per cent. of the controlled foreign company’s chargeable profits are apportioned to the resident company or persons connected or associated with it)—

(a) for “assessed and recoverable from” there shall be substituted “chargeable on”; and

(b) for “10 per cent.” there shall be substituted “25 per cent.”