Taxation (International and Other Provisions) Act 2010 section 371CE

Does Chapter 6 apply?

Section 371CE determines when Chapter 6 (trading finance profits) applies to a controlled foreign company's accounting period, and provides a mechanism for group treasury companies to elect for their trading finance profits to be treated as non-trading finance profits instead.

• Chapter 6 applies only where a CFC has trading finance profits and holds funds or assets derived from UK connected capital contributions
• A group treasury company can elect, by notice to HMRC, for its trading finance profits to be treated as non-trading finance profits, thereby disapplying Chapter 6
• Where such an election is made, the reclassified profits cannot benefit from the incidental non-trading finance profit exemptions or the exclusions for profits arising from investment of funds held for exempt trades or property businesses
• The notice must be given within 20 months of the end of the accounting period (or longer if HMRC allows), and only by companies holding more than half of the total apportionable share of the CFC's chargeable profits