835M. Determination of residence

(1) Subject to subsection (6), for the purposes of this Part, a controlled foreign company shall be regarded as being resident for an accounting period in the territory in which, throughout that period, it is subject to tax by reason of domicile, residence or place of management.

(2) Where there are two or more territories falling within subsection (1) in any accounting period, the company shall in that accounting period be regarded as being resident—

(a) where, throughout the accounting period, the company’s place of effective management is situated in one of the territories, in that territory,

(b) where, throughout the accounting period, the company’s place of effective management is situated in two or more of the territories and immediately before the end of the accounting period more than 50 per cent of the company’s assets are situated in a territory, in the territory in which those assets are situated, or

(c) where neither paragraph (a) nor (b) applies and immediately before the end of the accounting period more than 50 per cent of the company’s assets are situated in one of the territories, in that territory.

(3) Where in an accounting period there is no territory falling within either of subsection (1) or (2), the company shall be regarded as being resident in the territory in which it is incorporated or formed.

(4) For the purpose of subsection (2), the amount of the company’s assets are to be determined by reference to their market value immediately before the end of the accounting period.

(5) In this section, ‘market value’ shall be construed in accordance with section 548.

(6) Nothing in this section shall require a company to be regarded as being resident in a territory other than the territory in which it is regarded, for the purposes of any arrangements having the force of law by virtue of section 826(1), as being resident.