Corporation Tax Act 2010

Part 3 Currency

Sterling equivalent of certain losses carried back to an earlier period

11 (1) This paragraph applies if—

(a) a loss of a company (arising in an accounting period ending on or after 1 April 2010) (“the loss”) is required by section 7, 8 or 9 to be translated from a currency other than sterling into its sterling equivalent, and

(b) the loss is to be a carried-back amount that is to be carried back to an accounting period beginning before 29 December 2007.

(2) Section 12 (sterling equivalents: carried-back amounts) does not have effect in relation to the loss.

(3) The translation must be made by reference to—

(a) the average exchange rate for the accounting period mentioned in sub-paragraph (1)(a), or

(b) the rate mentioned in sub-paragraph (4).

(4) That rate is—

(a) if the amount to be translated relates to a single transaction, an appropriate spot rate of exchange for the transaction, or

(b) if the amount to be translated relates to more than one transaction, a rate of exchange derived on a just and reasonable basis from appropriate spot rates of exchange for those transactions.

(5) In this paragraph “carried-back amount” has the same meaning as in Chapter 4 of Part 2 (see section 17(2)).

Adjustment of certain sterling losses carried back to an earlier period

12 (1) This paragraph applies if—

(a) a loss arises in an accounting period ending on or after 1 April 2010,

(b) the loss is to be a carried-back amount that is to be carried back to an accounting period beginning before 29 December 2007, and

(c) apart from this paragraph section 14 would require the loss to be adjusted.

(2) Section 14 does not have effect in relation to the loss.

(3) In this paragraph “carried-back amount” has the same meaning as in Chapter 4 of Part 2 (see section 17(2)).

Right of company to elect for alternative provision to apply

13 (1) Paragraphs 14, 15 and 16 apply if a company—

(a) makes an election under this paragraph, or

(b) has (before 1 April 2010) made an election under paragraph 13 of Schedule 18 to FA 2009.

(2) An election by a company under this paragraph—

(a) must be made before the end of the period of 30 days beginning with the first day of the first accounting period of the company beginning on or after 21 July 2009, and

(b) is irrevocable.

14 In relation to an accounting period beginning before 21 July 2009 (and ending on or after 1 April 2010), Chapter 4 of Part 2 has effect in relation to the company—

(a) with the omission of sections 12 to 16,

(b) with the omission of section 17(2), (3) and (5),

(c) with the substitution of the following for section 10(2) and (3)—

“(2) The translation must be made by reference to the appropriate exchange rate.

(3) The appropriate exchange rate is—

(a) the average exchange rate for the current accounting period, or

(b) an appropriate spot rate of exchange for the transaction in question.”, and

(d) with the substitution of the following for section 11(2) to (4)—

“(2) The translation must be made by reference to the appropriate exchange rate.

(3) The appropriate exchange rate is—

(a) the average exchange rate for the current accounting period, or

(b) an appropriate spot rate of exchange for the transaction in question.”

15 This Schedule has effect in relation to the company as if the following paragraphs were substituted for paragraphs 11 and 12—

“11 (1) This paragraph applies if—

(a) a loss of a company (arising in an accounting period ending on or after 1 April 2010) (“the loss”) is required by section 7, 8 or 9 to be translated from a currency other than sterling into its sterling equivalent,

(b) the translation is for the purpose of calculating a loss arising in an accounting period beginning on or after 21 July 2009, and

(c) the loss is to be a carried-back amount that is to be carried back to an accounting period beginning before 21 July 2009.

(2) Section 12 (sterling equivalents: carried-back amounts) does not have effect in relation to the loss.

(3) The translation must be made by reference to—

(a) the average exchange rate for the accounting period mentioned in sub-paragraph (1)(b), or

(b) the rate mentioned in sub-paragraph (4).

(4) That rate is—

(a) if the amount to be translated relates to a single transaction, an appropriate spot rate of exchange for the transaction, or

(b) if the amount to be translated relates to more than one transaction, a rate of exchange derived on a just and reasonable basis from appropriate spot rates of exchange for those transactions.

(5) In this paragraph “carried-back amount” has the same meaning as in Chapter 4 of Part 2 (see section 17(2)).

12 (1) This paragraph applies if—

(a) a loss arises in an accounting period beginning on or after 21 July 2009 (and ending on or after 1 April 2010),

(b) the loss is to be a carried-back amount that is to be carried back to an accounting period beginning before 21 July 2009, and

(c) apart from this paragraph section 14 would require the loss to be adjusted.

(2) Section 14 does not have effect in relation to the loss.

(3) In this paragraph “carried-back amount” has the same meaning as in Chapter 4 of Part 2 (see section 17(2)).”

16 In relation to profits or losses arising in accounting periods of the company ending before 1 April 2010, an election under paragraph 13 has the effect that it would have had if it had been made under paragraph 13 of Schedule 18 to FA 2009 (assuming that that paragraph had not been repealed by this Act).