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7U.K.After section 751AB of that Act (inserted by paragraph 2 of this Schedule) insert—
(1)This section applies if—
(a)an exempt period in relation to a controlled foreign company ends in accordance with paragraph 15F(2) of Schedule 25 (time exempt period ends if there is an early termination event), other than by reason of an early termination event within paragraph 15F(3)(b),
(b)an accounting period (“the relevant accounting period”) of the company ends after that exempt period but before the time the exempt period would have ended had paragraph 15F(2) of that Schedule not applied,
(c)an apportionment under section 747(3) would fall to be made as regards the relevant accounting period, and
(d)a company resident in the United Kingdom (“the UK resident company”) has a relevant interest in the controlled foreign company in that period.
(2)The UK resident company may make an application to the Commissioners for Her Majesty's Revenue and Customs for the chargeable profits of the controlled foreign company for that accounting period (“the chargeable profits”) to be reduced to an amount (“the specified amount”) specified in the application (which may be nil).
(3)If the Commissioners grant the application—
(a)the chargeable profits are treated as reduced to the specified amount, and
(b)the controlled foreign company's creditable tax (if any) for that period is treated as reduced by so much of that tax as, on a just and reasonable basis, relates to the reduction in the chargeable profits,
for the purpose of applying section 747(3) to (5) for determining the sum (if any) chargeable on the UK resident company under section 747(4)(a) (but for no other purpose).
(4)The Commissioners may grant the application only if—
(a)they are satisfied that the specified amount is not less than the relevant amount, and
(b)they have not previously granted an application made by the UK resident company in respect of the relevant accounting period under section 751A or 751AB.
(5)“The relevant amount” means the amount (if any) equal to so much of the chargeable profits as it is just and reasonable to regard as referable to—
(a)the relevant transaction which triggered the end of the exempt period, or
(b)any later relevant transaction occurring before the time the exempt period would have ended had paragraph 15F(2) of Schedule 25 not applied.
(6)“Relevant transaction” has the meaning given by paragraph 15E of Schedule 25 (and it does not matter if the transaction occurs pursuant to an agreement entered into by the controlled foreign company before the relevant time (within the meaning of paragraph 15G of that Schedule)).”