The government’s update on plans for the new Controlled Foreign Company (CFC) rules demonstrates that it has listened to feedback on the draft legislation and will aim to accommodate some of the more widely suggested changes.
In particular the proposed ‘gateway test’ is to be revised to include a more straightforward initial test to allow many groups to determine whether their subsidiaries are outside of the CFC rules and stop there without having to go through the detailed calculations a company which is likely to be a CFC would have to do. There is also a confirmation that the complexities of the excluded territories exemption and the scope of the many newly proposed anti-avoidance rules will be reconsidered.
Turning to some...
