Foreign Exchange Gains and Losses (Hansard, 23 April 1980)

§ Mr. Nicholas Baker

asked the Chancellor of the Exchequer (1) what principles are applied by the Inland Revenue in its current practice concerning the treatment of foreign exchange gains and losses, whether realised or unrealised, in respect of foreign currency borrowings and loans made by companies registered in the United Kingdom pursuant to the Inland Revenue statement dated 6 October 1976 in drawing the distinction, mentioned in the 1976 statement, between borrowings regarded as being from fixed as distinguished from those on circulating capital accounts;

(2) whether any distinction is drawn by the Inland Revenue in its current practice concerning the treatment of foreign exchange gains and losses, whether realised or unrealised, in respect of foreign currency borrowings and loans made by companies resident in the United Kingdom pursuant to the Inland Revenue statement dated 6 October 1976 between borrowings for a short term and those for a longer term;

(3) whether any distinction is drawn by the Inland Revenue in its current practice concerning the treatment of foreign exchange gains and losses, whether realised or unrealised, in respect of foreign currency borrowings and loans made by companies resident in the United Kingdom pursuant to the Inland Revenue statement dated 6 October 1976 between borrowings raised by companies from external lenders, whether or not with the benefit of guarantees from other members of the borrowing company's group, and those raised from lenders within the borrower's group;

(4) if he will outline the current Inland Revenue practice concerning the treatment of foreign exchange gains and losses, 150W whether realised or unrealised, in respect of foreign currency borrowings and loans made by companies resident in the United Kingdom and in particular to supplement the Inland Revenue statement dated 6 October 1976;

(5) whether any particular criteria are applied by the Inland Revenue in its current practice concerning the treatment of foreign exchange gains and losses, whether realised or unrealised, in respect of foreign currency borrowings and loans made by companies registered in the United Kingdom pursuant to the Inland Revenue statement dated 6 October 1976 to finance companies controlled from overseas which borrow foreign currency for conversion into £ sterling to lend out in the United Kingdom in the course of their business operation.