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HMRC internal manual

International Manual

From
HM Revenue & Customs
Updated
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Controlled Foreign Companies: apportionment of chargeable profits and creditable tax: Adjustments for changes in ordinary shareholdings

Where the percentage of ordinary shares held changes during the accounting period the relevant interest is based on the average percentage held over the accounting period of the controlled foreign company. This is given by the formula:

(P x H)/A

P is the percentage of ordinary shares held (based on the formula P X S above) for each period in which the shareholding remained the same during the controlled foreign company’s accounting period.

H is the number of days for which the shareholding remained the same, the ‘holding period’.

A is the number of days in the accounting period of the controlled foreign company.