There may be occasions where a holding of shares in a CFC is effectively taxed in the hands of the chargeable company other than through a CFC charge. This may occur where a chargeable company holds an interest in the CFC through the holding of shares and those shares are held as trading assets. In these circumstances the movement in the value of the assets will be reflected in the UK taxable profit computation of the company holding the shares. It follows that the profits of the CFC that are reflected in the value of the shares will have been exposed to corporation tax.

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