Introduction Details of the Schedule Part 3 – Reduction in Chargeable Profits for Certain Financing Income
46.Paragraphs 21 and 22 amend ICTA to take account of the introduction of section 751AA.
47.Paragraph 23 inserts the new section into the CFC rules in ICTA. It applies where an apportionment is to be made under section 747(3) and;
48.It allows the UK company to which the profits are to be apportioned to apply to the Commissioners for a reduction in the chargeable profits of the CFC. If the Commissioners grant the application those profits are treated as reduced by the specified amount and the CFC’s creditable tax are accordingly reduced on a just and reasonable basis.
49.The purpose of the new provision is to ensure that a restriction of an interest deduction under Schedule 15, Finance Act 2009 cannot interact with the CFC rules so as to cause the affected group to suffer double taxation.
50.Paragraph 24 amends the supplementary provision in section 751B, ICTA to take account of section 751AA.
51.Paragraph 25 specifies that the amendments made in Part 3 have effect in relation to accounting periods of CFCs ending on or after 1 January 2010.