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Non trading loan relationship

Non trading loan relationship

UK company has issued € share capital however the accounts are prepared in GBP. Is it right that the share capital value shown by the balance sheet is at the historic rate and the unpaid € amount (holding company debtor) is shown at the balance sheet rate with any fx differences being a non-trading loan relationship? 

Many thanks for confirmation.

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26th Nov 2012 16:21

Is the shares equity or debt? Equity does not get revalued, but if it was debt it would be.

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By charlb
27th Nov 2012 09:13

Hi, thanks for your response. The shares are equity, however they are not paid hence there is an outstanding loan balance for the full amount payable on the shares. Currently I have the share capital translated at historic rate and was under the impression that the loan balance should be translated at closing rate as it is a monetary debt? This gives me a difference in exchange arising as a result of movements in the loan balance. As its quite substantial, I just want to check the tax implications.

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27th Nov 2012 10:27

Can't help you on the tax implications, sorry. Has the unpaid amount been called up (ie is it really a debtor) though? Mistakes there are quite common and would possibly solve the problem.

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By charlb
28th Nov 2012 09:07

Thanks Limey - yes share capital stated as paid in the annual return so it would appear that the unpaid amount should be treated as a loan. Thanks anyway.

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28th Nov 2012 09:59

Stated as paid? Gulp. That should probably get paid then.

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