The Exchange Gains and Losses (Alternative Method of Calculation of Gain or Loss) Regulations 1994

Unremittable income

Reduction in exchange gains and losses

3.—(1) This regulation applies in any case where—

(a) an asset falling within section 153(1)(a) or (b) of the 1993 Act is held by a company, and

(b) income represented by the asset is unremittable on any day which falls in an accrual period for that asset.

(2) In any case where this regulation applies, the amount of the initial exchange gain or initial exchange loss which, apart from this regulation, would accrue to the company as respects the asset for the period in question shall, subject to paragraphs (3) and (4) below, be found in accordance with the alternative method of calculation.

(3) The accrued amount for each day in that period during which the income is unremittable shall—

(a) if all the income represented by the asset is unremittable on that day, be reduced to nil, or

(b) if only a proportion of the income represented by the asset is unremittable on that day, be reduced by a corresponding proportion.

(4) Where income which has been unremittable during an accrual period becomes remittable at any time during that period, the initial exchange gain or loss as respects the asset for that period shall be calculated as if the time when income becomes remittable were a translation time, (but not so as to create more than one accrual period), so that—

(a) separate amounts are found for different parts of the period, and

(b) paragraph (3) above is applied in relation to each such amount.