Corporation Tax Act 2009 section 172

Application of Chapter

Section 172 sets out when the unremittable amounts relief in Chapter 12 applies and defines the key concepts of "unremittable" and "foreign exchange restrictions".

• The chapter applies where a trading company has income that has been included in its taxable trading profits but some or all of that income is stuck overseas due to foreign exchange restrictions and cannot be brought back to the United Kingdom.
• An amount already received is unremittable if it cannot be transferred to the United Kingdom because of foreign exchange restrictions; an amount still owed is unremittable if it cannot be paid in the United Kingdom, and either cannot temporarily be paid locally or, if paid locally, could not then be transferred to the United Kingdom, in each case because of foreign exchange restrictions.
• Foreign exchange restrictions means restrictions arising from the laws of the overseas territory, executive action by its government, or the impossibility of obtaining in that territory a currency that could be transferred to the United Kingdom.
• The loan relationship priority rule in section 464(1) does not prevent amounts from being dealt with under the unremittable amounts provisions in sections 173 and 175, so the relief applies even where the amounts in question are loan relationships such as trade debts.