Corporation Tax Act 2010 section 15

Carried-forward amounts

Section 15 deals with how a carried-forward loss must be adjusted when a UK resident company that accounts in sterling (or treats sterling as its functional currency) carries that loss forward into an accounting period where its tax calculation currency is a non-sterling currency.

• The section applies to UK resident companies that prepare their accounts in sterling, or identify sterling as their functional currency, under generally accepted accounting practice.
• It is triggered when a loss calculated for corporation tax purposes needs to be carried forward into an accounting period in which the company's tax calculation currency is a currency other than sterling.
• The carried-forward loss must first be translated into the later tax calculation currency at the spot exchange rate on the first day of the relevant accounting period, and then translated back into sterling at the same exchange rate used to translate the profit against which it will be set off.
• The relevant accounting period is the earliest period that both begins after the period in which the loss arose and is a period in which the company's tax calculation currency is the non-sterling currency in question.