CTM76620 - Exchange differences: matching: disposal of matched assets

Where there is a disposal of an asset which at any time before that disposal was a matched asset (to any extent) any exchange differences accruing on any liabilities which were left out of account as a result of an election to match that asset are brought into account at the time of the disposal except where:

1. the asset is reacquired by the company under a contract made, that is, unconditional entitlement is established, not more than 30 days before or 30 days after the disposal time,

or

2. the relevant election was for the company's net investment in a branch (category 4 at CTM76540) and the asset was included in that investment immediately before disposal,

or

3. the CG rules provide that the chargeable gain or allowable loss on the asset is deferred (see CTM76670).

The condition at (1) is to prevent companies opting out of matching and crystallising exchange losses when it suits them through the disposal and reacquisition of assets.

Regulation 4(6) SI1994/3227

Regulation 4(6) provides that ‘disposal' is construed in accordance with TCGA92 and includes a part disposal. The time at which a disposal occurs is also construed in accordance with that act.