{
  "url": "https://openlegislation.uk/income-tax-act-2007/section-725",
  "json_url": "https://openlegislation.uk/income-tax-act-2007/section-725.json",
  "legislation": "ukpga/2007/3",
  "legislation_title": "Income Tax Act 2007",
  "legislation_url": "https://openlegislation.uk/income-tax-act-2007",
  "path": "section/725",
  "kind": "section",
  "number": "725",
  "heading": "Reduction in amount charged where controlled foreign company involved",
  "text": "(1) This section applies if—\n(a) under Part 9A of TIOPA 2010 (controlled foreign companies), the CFC charge is charged in relation to a CFC's accounting period,\n(b) an amount of income is treated as arising to an individual under section 721 for a tax year, and\n(c) the income mentioned in section 721(2) is or includes a sum forming part of the CFC's chargeable profits for that accounting period.\n(2) The amount of income so treated is reduced by—\nS×CACPwhere—\nS is the sum forming part of the CFC's chargeable profits for that accounting period,\nCA is the CFC's chargeable profits for that accounting period so far as apportioned to chargeable companies at step 3 in section 371BC(1) of TIOPA 2010, and\nCP is the CFC's chargeable profits for that accounting period.\n(2A) In a case in which section 724 applies, the reference to S in the formula in subsection (2) is to be read as a reference to X% of S.\n(2B) “X%” is determined as follows—\n100 % × A Iwhere—\nA is the amount on which the individual is liable as determined under section 724(2), and\nI is the amount of the income mentioned in section 721(2).\n(3) Terms used in this section which are defined in Part 9A of TIOPA 2010 have the same meaning as in that Part.",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "S. 725(1) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 20 para. 22(2) (with Sch. 20 para. 50(9))"
    },
    {
      "type": "F",
      "label": "F2",
      "text": "S. 725(1)(b)(c) substituted for s. 725(1)(b) (with effect in accordance with Sch. 10 para. 20 of the amending Act) by Finance Act 2013 (c. 29), Sch. 10 para. 12(2)(4) (with Sch. 10 para. 12(4)(5))"
    },
    {
      "type": "F",
      "label": "F3",
      "text": "Words in s. 725(2) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 20 para. 22(3)(a) (with Sch. 20 para. 50(9))"
    },
    {
      "type": "F",
      "label": "F4",
      "text": "Words in s. 725(2) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 20 para. 22(3)(b) (with Sch. 20 para. 50(9))"
    },
    {
      "type": "F",
      "label": "F5",
      "text": "S. 725(2A)(2B) inserted (with effect in accordance with Sch. 10 para. 20 of the amending Act) by Finance Act 2013 (c. 29), Sch. 10 para. 12(3)"
    },
    {
      "type": "F",
      "label": "F6",
      "text": "S. 725(3) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 20 para. 22(4) (with Sch. 20 para. 50(9))"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukpga/2007/3/section/725",
    "retrieved_at": "2026-10-29T09:13:03.599581+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}