Foreign Denominated Losses
HMRC have published draft legislation together with an explanatory note on the issue of foreign denominated losses. The draft legislation has been designed to ensure that when a company prepares its tax computation in a currency other than sterling any losses carried forward to future accounting periods or back to a previous accounting period will be translated into sterling at the same exchange rate as the profits they are offsetting.
The draft legislation is intended to take effect for the accounting periods beginning on or after 29 December 2008 although businesses can elect to defer this date to the beginning of the first accounting period beginning on or after when the legislation becomes law (the date of Royal Assent for Finance Bill 2009).