CFM9440 - Taxing forex: matching under Disregard Regulations: trading assets

Restrictions on assets that can be matched

This guidance applies to periods of account beginning on or after 1 January 2005

Regulations 3 and 4 permit the liability or derivative contract to be matched to shares, ships or aircraft – a ship or aircraft may in some cases be accounted for as a foreign operation. But matching under regulation 3 or 4 is not permitted where the shares, ships or aircraft are assets held on trading account. If a profit on the sale of the assets would be a profit of the trade the regulations cannot apply to disregard the exchange gain or loss on the liability or derivative matching the asset.