# The Controlled Foreign Companies (Excluded Countries) Regulations 1998, Note: Explanatory note


(This note is not part of the Regulations)
These Regulations disapply section 747(3) of the Income and Corporation Taxes Act 1988 (apportionment of a controlled foreign company’s profits among persons having an interest in the company) in cases where the controlled foreign company is resident in a territory specified in either of the two Schedules to the Regulations and satisfies one of two conditions. The first condition, which relates to a company which is resident in a territory specified in Part I of either Schedule, is that the company satisfies the income and gains requirement set out in the Regulations. The second condition, which relates to a company which is resident in a territory specified in Part II of either Schedule, is that the company not only satisfies the income and gains requirement but also is not entitled to any tax benefit, or does not satisfy any condition, specified in Part II of the Schedule in relation to the territory concerned. Schedule 1 to the Regulations relates to accounting periods of controlled foreign companies beginning before 9th July 1998, and Schedule 2 relates to accounting periods of controlled foreign companies beginning on or after that date.
The Regulations have effect in relation to any accounting period of a company resident in the United Kingdom ending on or after the day to be appointed for the purposes of corporation tax self-assessment (“an appropriate accounting period”), in circumstances where the United Kingdom company had an interest in a controlled foreign company, within the meaning of Chapter IV of Part XVII of the 1988 Act, at any time during an accounting period of the controlled foreign company ending in an appropriate accounting period of the United Kingdom company. The day to be appointed for the purposes of corporation tax self-assessment is 1st July 1999.
Regulation 1 provides for citation, commencement and effect, and regulation 2 for interpretation.
Regulation 3 introduces the Schedules which specify the territories in one of which the controlled foreign company is required to be resident and, in Part II of each Schedule, the tax benefit or condition relating to each specified territory.
Regulation 4 summarises the conditions to be satisfied by the controlled foreign company, and regulations 5 and 6 deal with one of those conditions relating to the company’s income and gains.
Regulation 7 provides for the interpretation of expressions used in regulations 5 and 6.

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Source: https://www.legislation.gov.uk/uksi/1998/3081/note (the official version)
Page: https://openlegislation.uk/controlled-foreign-companies-excluded-countries-regulations-1998/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.