Schedule 26 to ICTA: Controlled foreign companies: reliefs against liability for tax in respect of chargeable profits
1411.Paragraph 4 of Schedule 26 to ICTA is concerned with the charge on UK resident companies under section 747(4)(a) of ICTA. This Schedule substitutes, in paragraph 4(4) of that Schedule, references to sections 36, 40 and 42 of this Act. These sections limit DTR by way of credit against, respectively, income tax, capital gains tax and corporation tax.
1412.The reference to section 36 (which is based on section 796 of ICTA) is needed because the calculations under paragraph 4 of Schedule 26 to ICTA take account of participators in the controlled foreign company who are income tax payers.
1413.The reference to section 40 reflects the application of section 277(1) of TCGA to section 796 of ICTA. If this reference is needed, its omission would change the law to the taxpayer’s disadvantage. This reference is therefore included out of caution.
