Corporation Tax Act 2009 section 606

Exchange gains and losses

Section 606 establishes how exchange gains and losses arising from derivative contracts are treated for corporation tax purposes, including key exclusions and regulatory powers.

• Exchange gains and losses from derivative contracts form part of the profits and losses brought into account under the derivative contracts regime
• Exchange gains or losses arising from translating a business's results from its functional currency into another currency are excluded, provided they have been recognised as other comprehensive income
• Investment companies are not taxed on exchange gains or losses that arise solely because the company changed its functional currency, unless a designated currency election is in effect
• The Treasury has broad powers to make regulations that exclude or include specific types of exchange gains or losses, and to specify how such amounts should be calculated and brought into account