CFM9001 - Taxing FOREX: introduction

Overview

This guidance describes the post-FA2002 taxation of loan relationships, derivative contracts and forex

This part of the guidance covers the taxation of foreign exchange (FOREX) gains and losses.

The treatment of FOREX gains and losses broadly follows the tax treatment of debits and credits set out in the loan relationships legislation. The following pages cover

• the basic rules, and
• the circumstances when special rules are needed.

If you are not familiar with the loan relationship rules, full details can be found at CFM5000+.

If you are already familiar with FOREX legislation, you can see a summary of the major changes following FA 2002 at CFM2200.

You may also find it helpful to look at other parts of the guidance dealing with FOREX in order to understand the company's perspective. These are

• Understanding FOREX,
• Accounting for FOREX, and
• Currency transactions and currency accounting.

To decide if this manual or the old guidance applies, see CFM9002.