Corporation tax for P6 (UK) - part 4: self-test

Test your understanding

(1). State whether the following statements are true or false.

A There will not be a CFC charge if the CFC does not have any chargeable profits.
B
There may be a CFC charge if the CFC’s profits are £80,000.


(2)
. State whether the following statements are true or false.

A The tax exemption from the CFC charge applies where the tax rate in the overseas country is at least 75% of the UK rate.
B
Chargeable profits consist of the income of the CFC that has been artificially diverted from the UK.


(3). JUV Ltd owns 18% of the ordinary share capital of RTB Co, a controlled foreign company.

Explain how any CFC charge levied on JUV Ltd will be calculated.


Answers