Although the current CFC regime is widely perceived as an obstacle to doing business in the UK, the fear of setting up a holding company in the UK in order to do business is to a large extent unjustified, particularly for multinational trading groups with significant UK operations.
It should currently be possible for a US-based multinational trading group with significant UK operations to move its low-taxed non-US subsidiaries to a new UK holding company without triggering a CFC apportionment, owing to the availability of certain exemptions introduced by the recent CFC interim measures in FA 2011, or alternatively the current exempt activities test.
The new UK holding company should also be able to rely on relevant exemptions under the new Finance Bill 2012 proposals in future accounting periods.
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