What did section 606A of the Corporation Tax Act 2009 define?

Section 606A defined what it meant for arrangements to have a 'one-way exchange effect' under United Kingdom corporation tax law. It targeted arrangements structured so a company could benefit from favourable exchange rate movements whilst being insulated from unfavourable ones, thereby gaining a tax advantage through foreign exchange exploitation.

When was section 606A of CTA 2009 repealed and by which legislation?

Section 606A was repealed by the Finance (No. 2) Act 2015, under section 32 and Schedule 7, paragraph 69. The removal took effect for accounting periods beginning on or after 1 January 2016. This repeal formed part of a broader overhaul of the loan relationships and derivative contracts rules in United Kingdom tax legislation.

What replaced the foreign exchange anti-avoidance provisions in sections 606A to 606H?

The entire group of sections 606A through 606H was replaced by a modernised framework introduced through the Finance (No. 2) Act 2015. This new regime, effective for accounting periods beginning on or after 1 January 2016, was considered more effective at addressing the types of foreign exchange anti-avoidance arrangements these sections had targeted.

Did companies with accounting periods straddling 1 January 2016 need to apply section 606A?

Yes. Companies whose accounting periods began before 1 January 2016 but ended after that date may still have needed to consider the old rules under sections 606A to 606H for those earlier periods. For subsequent accounting periods beginning on or after 1 January 2016, these provisions no longer apply as they were omitted from the legislation.

Corporation Tax Act 2009 section 606A

Arrangements that have a "one-way exchange effect"

Section 606A, which previously defined arrangements having a "one-way exchange effect" for the purposes of the foreign exchange anti-avoidance rules, was removed from the legislation with effect from 1 January 2016.

Section 606A was part of a group of provisions (sections 606A to 606H) dealing with foreign exchange anti-avoidance arrangements
All of these sections were omitted by the Finance (No. 2) Act 2015, under section 32 and Schedule 7, paragraph 69
The removal took effect for accounting periods beginning on or after 1 January 2016
Companies with accounting periods straddling 1 January 2016 would have needed to consider transitional implications

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