The Treasury’s multinational business forum has the UK’s controlled foreign companies (CFC) rules back onto its agenda.  The CFC rules are intended to stop UK companies routing passive income to subsidiaries in low tax jurisdictions overseas – passive income can include royalties from licences of intellectual property (amongst other forms of income).  The CFC rules were originally intended to be updated as part of the legislation bringing in an exemption from corporation tax for foreign dividends, but the proposed changes were so broad as to be unworkable and would have meant that UK companies would be penalised for owning any subisidiaries with IP; the Treasury then postponed the CFC rules update to have more time to consult with business.

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