Corporation Tax Act 2010 section 13

Sterling equivalents: carried-forward amounts

Section 13 sets out how a loss carried forward to a later accounting period must be translated into sterling when the company calculates its tax in a currency other than sterling.

• Where the company's tax calculation currency has not changed between the period of the loss and the period it is carried forward to, the loss is translated into sterling using the same exchange rate as the profit it will be set against.
• Where the tax calculation currency has changed and the new currency is sterling, the loss is translated into sterling at the spot exchange rate on the first day of the earliest accounting period in which the company uses the new currency.
• Where the tax calculation currency has changed and the new currency is another non-sterling currency, the loss is first converted into the new currency at the spot rate on the first day of the earliest period using that new currency, and then translated into sterling at the same rate used for the profit it offsets.
• Key definitions distinguish between the "earlier" currency (when the loss arose), the "later" currency (when the loss is carried forward), and the "relevant accounting period" (the first period after the loss in which the company uses the later currency).

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