Foreign Denominated Losses: Draft Legislation

On 18 December 2008 the Financial Secretary to the Treasury announced that there would be changes to tax legislation, responding to two different issues, addressing problems that have come to light as a result of the recent turbulence in the financial markets. A draft clause on the first of those issues, relating to preference shares, has previously been released.

The draft clause (PDF 91K) relating to foreign denominated losses is released today along with the accompanying draft explanatory notes (PDF 54K).

These changes will amend section 92 to 92E Finance Act 1993 and insert new legislation so that companies that compute their profits for Corporation Tax purposes in currencies other than sterling carry forward or back any unused losses to offset future or past profits in those currencies instead of sterling.

If you have any comments on this draft clause or on the accompanying explanatory note, please contact Aidan Reilly on Tel 020 7147 2575 or Paul Gilham on Tel 020 7147 2619. Alternatively Aidan Reilly and Paul Gilham can be contacted by email, or you can write to them at the following address:

CT&VAT Specialist Financial
3C/03
100 Parliament Street
London
SW1A 2BQ