Practical Law UK Glossary 7-107-6340 (Approx. 3 pages)
Glossary
Controlled foreign company (CFC)
A company that is:
Resident outside the UK for tax purposes.
Controlled by a person or persons resident in the UK.
The basic aim of the CFC regime is to identify whether all or part of the profits of a non-UK resident company arising in an accounting period should be brought into the charge to UK corporation tax by attributing those profits to a UK resident person or persons. For a CFC charge to arise all of the following are required:
A non-UK resident company that is controlled by a UK resident person or persons (that is, a CFC).
A chargeable company (that is, a UK resident company that has a sufficient interest in the CFC).
The CFC has chargeable profits (that is, profits of a specified type that are regarded as sufficiently connected to the UK).
The CFC is not entitled to the benefit of one or more of the entity-level exemptions.