On 29 February the government published the latest update of its proposals for reform of the controlled foreign companies (CFC) rules that subject multinational groups’ offshore operations to UK taxation. These new measures, to be introduced in Finance Act 2012, should make it significantly easier for foreign subsidiaries and branches of UK companies to fall outside the UK tax net. The big new change is around the business profits filter, which will apply where any one of four conditions is met. These reforms will transform the UK tax landscape and should be welcomed by both UK multinational companies and inward investors.
