The new Controlled Foreign Company (CFC) regime represents a fundamental change to the UK's corporate tax system aimed at enhancing the competitiveness of the UK as a holding location for multinational businesses. It is coming into force on January 1 2013 following a long and detailed period of consultation.
The new CFC regime affects overseas operations of companies based in the UK (both subsidiaries of inbound parents and British entities). The new rules are highly complex and present a number of compliance issues as well as some opportunities for reorganising business structures.
All affected companies will have to consider these new rules, weighing up the risks and also the opportunities present.