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HMRC internal manual

Corporate Finance Manual

Old rules: forex and accounts drawn up in a foreign currency: pre 2005: accounts wholly in a foreign currency: how to complete the company return

Completing the company return (CT600)

This guidance applies for accounting periods between 1 October 2002 and 1 January 2005

Although the accounts and computations must be in the local currency, the CTSA return (form CT600) must use sterling throughout. The CT600 notes tell the company how the entries in particular boxes should be computed.

The general message is that for losses, or management expenses, or non-trading deficits brought forward,

if the amount (or a part of it) was found by computing and expressing it in a currency other than sterling for the period in which it was incurred,

then the amount to be entered should be (or include) the sterling equivalent found by using the same exchange rate as is used to compute the sterling profits even though the whole of the loss etc may be carried forward in currency terms.

Where a local currency balance is translated into sterling for entry on a return, and a year later there is a new balance to be translated for the next return, there is no need to relate those sterling figures to each other, or account for any exchange differences between them. It is the underlying local currency calculation that is valid for tax purposes, and HMRC staff will not seek to reconcile the sterling figures mathematically (FA93/S94AB(4)).