Corporation Tax Act 2009 section 475B

Meaning of "matched"

Section 475B defines when a loan relationship is considered "matched" for the purposes of the loan relationships rules, which is relevant to how exchange gains and losses are treated for corporation tax.

• A loan relationship is "matched" if it is in a matching relationship with another loan relationship or a derivative contract held by the same company, or if exchange gains or losses on it are excluded under regulations made under section 328(4)
• A matching relationship exists where one instrument is intended by the company to eliminate or substantially reduce the economic risk of the other
• "Economic risk" in this context means the risk arising from fluctuations in exchange rates between currencies over time
• A loan relationship that is not matched (or to the extent it is not matched) is referred to as "unmatched"