UK Controlled Foreign Company Reform: Further Draft Legislation on Permanent Changes to the CFC Rules

Sullivan & Cromwell LLP - February 6, 2012

The UK government has published revised draft legislation for a reformed controlled foreign company (“CFC”) code. This includes:

  • revised drafting for finance company exemptions, including a full exemption in some cases; and
  • new drafting to apply the CFC rules to UK companies with exempt foreign branches.

The government has also published a consultation update, setting out its direction of travel on:

  • safe harbours for banks and insurers from the special rules for finance profits;
  • a temporary period exemption; and
  • commencement of the reformed regime.