Corporation Tax Act 2009 section 486

Exclusion of exchange gains and losses in respect of tax debts etc

Section 486 excludes exchange gains and losses from being recognised under the non-lending relationships rules where they arise on certain tax debts or on amounts that are not deductible against profits.

• Exchange gains or losses on UK tax debts are completely excluded — no amounts are recognised for the purposes of this chapter
• Exchange gains or losses on foreign tax debts are only recognised where the foreign tax qualifies for a deduction (rather than a credit) under double taxation relief rules
• Exchange gains or losses are also excluded where the underlying money debt would have been deductible but for a disallowing statutory provision (other than the capital expenditure rule) or a rule of law
• Deductibility for these purposes means deductible as a trading expense, as expenses of management of an investment business, or as ordinary BLAGAB management expenses