This guidance describes the post-FA 2002 taxation of loan
relationships, derivative contracts and FOREX.
Daque plc draws up accounts in dollars and claims capital
allowances each year on plant and machinery.
In the APE 31/12/2008 the computation is as follows:
| $ | |
| Pool b/f | 1,852,728 |
| Expenditure | 543,750 |
| Disposals | 233,410 |
| Balance | 2,163,068 |
| WDA 25% | 540,767 |
| Pool c/f | 1,622,301 |
The Case I figure is calculated as follows:
| $ | |
| Adjusted P&L profit | 1,895,430 |
| less CAs | 540,767 |
| Case I profit | 1,354,663 * |
Only now is the amount translated into sterling for the
company tax return.
If the company translates its CT profits at the closing rate,
and the exchange rate at 31/12/08 is £1/$1.75 the entry for
trading profit on the return becomes £774,093.
