HMRC consults on foreign currency gains

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HMRC has kicked off a consultation on whether companies with a non-sterling functional currency should continue to be required to compute their chargeable gains and allowable losses in sterling.

The current rules require a company to calculate its capital gains and losses in sterling, even if the company draws up its accounts in a foreign currency.

The government published the consultation document because it was told that shares in group companies that are no longer needed for commercial or business purposes are being retained unnecessarily because of potential exposure to gains arising from foreign exchange movements since acquisition.

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