Finance Act 1998

3 (1) Section 748 of the Taxes Act 1988 (limitations on direction-making power) shall be amended as follows. U.K.

(2) In subsection (1) (no direction to be given if the conditions specified in any of the paragraphs of the subsection are satisfied) for the words preceding paragraph (a) there shall be substituted—

“(1) No apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company if—”.

(3) In paragraph (d) of that subsection (cases where chargeable profits do not exceed £20,000 etc) for “£20,000" there shall be substituted “ £50,000 ”.

(4) After that paragraph there shall be inserted “or

(e) as respects the accounting period, the company is, within the meaning of regulations made by the Board for the purposes of this paragraph, resident in a territory specified in the regulations and satisfies—

(i) such conditions with respect to its income or gains as may be so specified; and

(ii) such other conditions (if any) as may be so specified.”

(5) After subsection (1) there shall be inserted—

“(1A) Regulations under paragraph (e) of subsection (1) above may—

(a) make different provision for different cases or with respect to different territories;

(b) make provision having effect in relation to accounting periods of controlled foreign companies ending not more than one year before the date on which the regulations are made; and

(c) contain such supplementary, incidental, consequential and transitional provision as the Board may think fit.”

(6) Subsection (2) (which relates to directions under section 747) shall cease to have effect.

(7) In subsection (3) (which refers to paragraphs (a) to (d) of subsection (1)) for “(d)" there shall be substituted “ (e) ”.

(8) Also in subsection (3), for “no direction may be given under section 747(1) with respect to that accounting period if it appears to the Board that" there shall be substituted “ no apportionment under section 747(3) falls to be made as regards that accounting period if it is the case that ”.

(9) For the side-note to the section, there shall be substituted “ Cases where section 747(3) does not apply. ”