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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Foreign exchange: matching: anti-avoidance: FA 2009: ‘one way exchange effect’: overview

FA 2009: the ‘one-way exchange effect provision’

The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2006 - SI 2006/843) which aimed to counter particular ‘one-way bet’ schemes (CFM63010) were revoked by FA09, and replaced by a more widely targeted anti-avoidance rule (‘TAAR’), which prevents exchange gains from being matched where a ‘one-way exchange effect’ is present. The details of this rule are explained at CFM63120. onwards.


The new anti-avoidance rule applies to accounting periods beginning on or after 22 April 2009. Accounting periods straddling 22 April 2009 are treated as if they were two periods, with exchange gains and losses being computed separately for each period. The restriction on matching exchange gains applies to the part-period beginning on 22 April 2009, but not to the earlier part of the accounting period.

The commencement rule at FA09/SCH21/PARA11 also applies to the old regulations so they apply to a part-period up to 22 April 2009, but not subsequently.