Income Tax (Trading and Other Income) Act 2005

188 Application of Chapter

(1) This Chapter applies if—

(a) an amount received by, or owed to, a person carrying on a trade (“the trader”) is brought into account as a receipt in calculating the profits of the trade,

(b) the amount is paid or owed in a territory outside the United Kingdom, and

(c) some or all of the amount is unremittable.

(2) An amount received is unremittable if it cannot be transferred to the United Kingdom merely because of foreign exchange restrictions.

(3) An amount owed is unremittable if it cannot be paid in the United Kingdom and—

(a) it temporarily cannot be paid in the territory in which it is owed merely because of foreign exchange restrictions, or

(b) it can be paid in that territory but, if it were paid there, the amount paid would not be transferable to the United Kingdom merely because of foreign exchange restrictions.

(4) “Foreign exchange restrictions” are restrictions imposed by any of the following—

(a) the laws of the territory where the amount is paid or owed,

(b) executive action of its government, and

(c) the impossibility of obtaining there currency that could be transferred to the United Kingdom.