Unrealised Forex Gains/Losses

[marrow]

My client has an amount owing to a foreign subsidiary and at the company year end, this has created an unrealised foreign exchange gain. It is however unclear to me the tax treatment of this within the company.

I have been reading HMRC manuals and relevant commentary that I can find however I must admit that the position is still not clear to me - it appears that these unrealised gains/losses should be taxable/relievable each year under the loan relationship rules and I would welcome comments on whether this is the correct treatment and if possible some relevant, easy to read commentary on the subject!

Many thanks

Peter

[simplytax]

If under proper GAAP the gains/losses are recorded in the accounts based on year end translation rate then if intercompany debt that is not trading the gains/losses would be non trading loan relationship credits or debits.

[Incredulum]

It is just "utterly" straightforward, the tax follows the accounting. No need to read complicated guidance!