Non corporate exchange gains

Non corporate exchange gains

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During 2011/12 a non-UK resident client transfers a sum from his UK bank account to his US bank account which is automatically converted to US dollars.

He then transfers those US dollars to his Colombian bank account which is automatically converted to Colombian Pesos.

He then loans those Pesos to a Colombian company of which he is a working director and part-shareholder. The Colombian company is trading in Colombia (a luxury hotel) and needs those funds for trading purposes.

A year later, during 2012/13, the Colombian company repays my client part of the loan by transferring Pesos to his UK bank account which are automatically converted to UK sterling.

I am aware that exchange gains for individuals arising from bank accounts are exempt from 6 April 2012, but am wondering if the gains arising in these circumstances are likewise exempt (because they involve repayment of a loan which muddies the waters slightly)? Would the answer be any different if he was UK resident (which he is wef 2013/14)?

Thanks for any help.

Replies (5)

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By Montrose
09th Apr 2015 11:55

Money Laundering ????

Sounds like classic money laundering-tax is the least of your worries.

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By mail.taxperfect.co.uk
16th Apr 2015 10:37

Yes, it does smack of classic money laundering but I have no reason to believe that this is anything other than a bona fide arrangement. I shall of course be looking at the MLRs implications, and thanks for highlighting.

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By The Innkeeper
16th Apr 2015 10:51

now let me

dust off my barge pole!

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Portia profile image
By Portia Nina Levin
24th Apr 2015 16:12

(No subject)

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By mail.taxperfect.co.uk
16th Apr 2015 12:04

Thanks, and the forein currency bank account exemption is at...

S252(1) TCGA1992.

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