Part 4: Income tax, corporation tax and capital gains tax Section 36: CFC charge: abolition of relief Background note
The UK CFC rules (introduced by Finance Act 2012) are designed to reflect the way business operates in a global economy, whilst providing protection against the diversion of UK profits. A CFC charge arises to a UK company in relation to profits which have been diverted from the UK.
	The amendments in this section remove the ability of UK companies to reduce or eliminate a CFC charge by offsetting UK losses and surplus expenses against that CFC charge. This change is intended to ensure that the CFC rules operate as intended, and continue to protect the UK's corporation tax base.