This guidance describes the post-FA 2002 taxation of loan
relationships, derivative contracts and FOREX.
FA93/S92states the basic rule that for CT purposes, profits
and losses must be computed and expressed in sterling.
However, this is subject to FA93/S93(as well as to FA93/S93A,
as is explained at
CFM10513+). The provisions in FA93/S93
determine how you get from profits and losses computed from non-
sterling accounts to the sterling figures to be entered in the CT
return.
Profits in this context means trading profits and income from
other sources, for example Sch A income and non-trading loan
relationship credits, but not chargeable gains.
Losses means trading losses, management expenses and losses
from other sources such as non-trading deficits from loan
relationships, but not allowable losses within the meaning of TCGA
1992.
Profits and losses are computed in the currency of the
accounts, and only translated into sterling as a final step.
