# Taxation (International and Other Provisions) Act 2010, Section 371RC: Legal and economic control: the 40% rule


(1) This section applies to a non-UK resident company (“C”) if—
(a) in accordance with section 371RB(7), two persons (“the controllers”) control C, and
(b) one of the controllers is UK resident and the other is non-UK resident.
(2) If conditions X and Y are met, C is to be taken to be a CFC (if C would not otherwise be).
(3) Condition X is that the UK resident controller has interests, rights and powers representing at least 40% of the holdings, rights and powers in respect of which the controllers fall to be taken as controlling C.
(4) Condition Y is that the non-UK resident controller has interests, rights and powers representing—
(a) at least 40%, but
(b) no more than 55%,
of the holdings, rights and powers in respect of which the controllers fall to be taken as controlling C.

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Source: https://www.legislation.gov.uk/ukpga/2010/8/section/371RC (the official version)
Page: https://openlegislation.uk/taxation-international-and-other-provisions-act-2010/section-371RC
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.