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ICTA88/SCH25/PARA19 (2)

A company is ‘related� to a controlled foreign company if -

• it is resident outside the United Kingdom; and
• it is connected or associated (see INTM254410) with the controlled foreign company; and
• in relation to any company or companies resident in the United Kingdom, it fulfils or could fulfil, directly or indirectly, substantially the same functions as the controlled foreign company.

»Ê¹ÚÌåÓýapp term ‘related companyâ€� has a restricted meaning in the context of the motive test. »Ê¹ÚÌåÓýapp reason for making the assumption that ‘relatedâ€� companies do not exist is to forestall any contention that, in the absence of a controlled foreign company, it would be reasonable to suppose that its receipts would be received by another connected foreign company fulfilling the same function rather than by a UK resident.