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HMRC internal manual

Corporate Finance Manual

Foreign exchange: matching under the Disregard Regulations: trading assets

Restrictions on assets that can be matched

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.