D4.421 CFCs and the meaning of chargeable profits
If none of the full exemptions (as detailed in D4.410–D4.415) apply, it is necessary to determine the CFCs chargeable profits which are subject to the CFC charge.
A CFCs chargeable profits are its assumed taxable total profits for the relevant accounting period on the basis that:
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•ÌýÌýÌýÌý its assumed total profits for the accounting period are limited to those profits which pass through the CFC gateway (see below), and
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•ÌýÌýÌýÌý amounts which can be relieved against a company's income1 are done so on a just and reasonable basis2
CFCs—assumed taxable total profits
A CFC's assumed taxable total profits for an accounting period are what the taxable total profits would be if certain 'corporation tax assumptions' were applied3. The taxable total profits are calculated as detailed at D1.3024 with the following modifications5:
- Ìý
•ÌýÌýÌýÌý ignore chargeable gains
- Ìý
•ÌýÌýÌýÌý add in the accrued income of a settlement (apportioned on a just and reasonable
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