Did I miss anything?
The 'workaround' you describe is a recipe for insolvency.
The subsidiary's 'loss' is a cash loss that needs to be funded either from shareholders' funds or from debt.
Assuming you can 'offset' the losses of a foreign subsidiary against the taxable gains of a domestic entity (which is not always the case), then the next hurdle is to have sufficient domestic taxable gains to absorb the losses.
If there isn't enough gains then you need to be able to carry forward the losses into the next tax year (again, this is not always allowed). You then need to ensure you make sufficient gains to absorb the carried-forward foreign losses.
Assuming you get past the above, then you'll soon realise that you're still left out of pocket. This is because in 'offsetting' a loss against a gain, all you're really doing is saving the tax that you would otherwise pay on the gain. For a corporate tax rate of 21%, this means that for every £1 in cash you lose (and offset against a gain), you only get 21p back (being the 21p of tax you'd other pay on the £1 gain). Your net position is cash neutral.
Factor in the effect of any withholding taxes on dividends and interest and the scheme you described soon sees you slip into the red.
Repeat it enough times and you'll soon be broke.