Corporation Tax Act 2009 section 475

Meaning of expressions relating to exchange gains and losses

Section 475 defines what exchange gains and exchange losses mean for corporation tax purposes and gives the Treasury power to regulate how they are calculated.

• Exchange gains or losses arise when a company compares, at different times, the value of an asset or liability expressed in one currency against its valuation in another currency
• Where a comparison produces neither a gain nor a loss, the result is treated as an exchange gain of nil
• The Treasury may make regulations on how exchange gains and losses are calculated, and these may apply retrospectively to accounting periods beginning in the same calendar year the regulations are made
• An exchange gain or loss from a loan relationship means one arising from an asset or liability that represents that loan relationship