Corporation Tax Act 2009 section 483

Exchange gains and losses: amounts treated as money debts

Section 483 explains how certain items — including currency holdings, accounting provisions, and insurance-related balances — are treated as money debts for the purpose of bringing exchange gains and losses within the loan relationships rules.

• Any currency held by a company is treated as a money debt owed to the company, bringing exchange movements on currency holdings into the loan relationships regime.
• An accounting provision for a potential liability is treated as a money debt owed by the company, provided the liability would relate to a trade or property business and the provision is already taken into account in calculating taxable profits of that business.
• For insurance companies, deferred acquisition costs are treated as a money debt owed to the company, while provisions for unearned premiums or unexpired risks are treated as money debts owed by the company.
• These rules are subject to a separate exclusion under section 486, which removes exchange gains and losses arising on tax debts from this treatment.