The Exchange Gains and Losses (Transitional Provisions) Regulations 1994

Overall exchange gains and losses and cumulative taxed gains and losses

19.—(1) Where this Part applies, there shall be calculated the aggregate amount of—

(a) the pre—commencement gain or loss, and

(b) the post—commencement net gain or loss.

(2) The aggregate amount found in accordance with paragraph (1) above is referred to in this Part, if positive, as “the overall exchange gain”, Z, and if negative as “the overall exchange loss”, W, and if the aggregate is zero there shall be an overall exchange loss of zero.

(3) In the case of any asset or liability to which this Part applies and as respects which an initial exchange gain or loss has accrued for the current period, there shall be calculated the aggregate amount of the initial exchange gains and losses which have accrued to the company as respects the asset or liability for accrual periods earlier than the current period, and—

(a) if that aggregate amount is positive it shall be the cumulative taxed gain, G, for that asset or liability for the current period,

(b) if it is negative it shall be the cumulative taxed loss, L, for that asset or liability for the current period, and

(c) in cases where that aggregate amount is zero there shall be taken to be a cumulative taxed loss equal to zero for the period.

(4) For the purposes of paragraph (3) above—

(a) the question whether any initial exchange gain or loss has accrued for the current period shall be determined disregarding regulations 20 to 22 and the regulation 2(2) provisions;

(b) the question whether any initial exchange gain or loss has accrued for any period other than the current period shall be determined in accordance with this Part but as if the regulation 2(2) provisions had never come into force; and

(c) there shall be disregarded any gain or loss which has accrued for an accrual period other than the current period unless—

(i) it has been taken into account in computing the profits or gains of the company holding or owing the asset or liability for the purposes of corporation tax for accounting periods ending before the beginning of the current period, or

(ii) it would have been so taken into account if the regulation 2(2) provisions had never come into force; or

(iii) it is equal to zero.