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HMRC internal manual

Corporate Finance Manual

Old rules: derivative contracts: basic rules pre FA 2004: exchange gains and losses

Exchange gains and losses

This guidance applies to periods of account beginning before 1 January 2005

FA02/SCH26/PARA16 is modelled on FA96/S84A.

FA02/SCH26/PARA16(1) gives the main rule that exchange gains and losses which arise from a company’s derivative contracts are included in the profits, gains and losses brought into account generally.

This general rule is subject to the special matching provisions that provide for the deferral of any tax charge or relief on exchange gains and losses to which the provisions apply (see CFM62000 onwards).