Section GB 11 — Income Tax Act 2007: Temporary increases in totals for control interest categories

GB 11 Temporary increases in totals for control interest categories When this section applies (1) This section applies when,— (a) before the end of a quarter, an increase occurs in the total of direct control interests in a foreign company in any of the control interest categories (the total increase ); and (b) the total increase results in a person (the interest holder ) having a reduced income interest or control interest in a foreign company (the interest reduction ); and (c) within 365 days after the total increase, a reduction occurs in the total for the control interest category (the total reduction ); and (d) the interest reduction has the effect of reducing attributed CFC income or attributed repatriation of— (i) the interest holder; or (ii) an associated person of the interest holder; or (iii) if the interest holder is a CFC, another person holding an income interest in the interest holder; and (e) the total increase and total reduction are part of an arrangement that has an effect of defeating the intent and application of the international tax rules. Treatment of interest reduction (2) The interest reduction is treated as not having occurred, when the interest holder’s control interest or income interest in the foreign company at the end of the quarter is calculated, to the extent to which the total reduction reverses the interest reduction. Defined in this Act: arrangement , associated person , attributed CFC income , attributed repatriation , CFC , control interest , control interest category , direct control interest , foreign company , income interest , international tax rules , quarter , Compare: 2004 No 35 s GC 9(2), (7)