The UK rules in relation to trading profits operate by reference to where the significant people functions (SPFs) that generate those profits are carried out, rather than by applying a generic test in relation to substantial activities. Broadly speaking, a CFC charge arises  in respect on any trading profits where the majority of the SPFs which generate those profits are carried out in the UK. For trading finance profits (banking and insurance) a charge will arise where the CFC is overcapitalised with funds received from UK connected persons (UK group companies). For non-trade finance profits, a charge will arise in relation to funds generated by UK SPFs, funds generated by UK connected capital (from UK group companies), arrangements in lieu of dividends to the UK and certain leasing arrangements. For certain intra-group financing arrangements, a partial (75%) exemption can be applied and, in limited circumstances, a full (100%) exemption can apply. Other entity level exemptions can apply in relatio to low profits, low profit margins, high effective tax rates (at least 75% of UK corporation ETR) and excluded countries with similar tax base/rate to UK.