Section 96 | Foreign companies: trading currency.

(1)In Schedule 24 to the Taxes Act 1988 (assumptions for calculating chargeable profits, creditable tax and corresponding United Kingdom tax of foreign companies) the following paragraph shall be inserted after paragraph 4—

4A

(1)Sub-paragraph (2) below applies where—

(a)the company carries on a trade, and

(b)the currency used in the accounts of the company for an accounting period is a currency other than sterling.

(2)It shall be assumed that by virtue of regulations under section 93 of the Finance Act 1993 (corporation tax: currency to be used) the basic profits or losses of the trade for the accounting period are to be computed and expressed for the purposes of corporation tax in the currency used in the accounts of the company for the period.

(3)References in this paragraph to the accounts of a company—

(a)are to the accounts which the company is required by the law of its home State to keep, or

(b)if the company is not required by the law of its home State to keep accounts, are to the accounts of the company which most closely correspond to the individual accounts which companies formed and registered under the Companies Act 1985 are required by that Act to keep;

and for the purposes of this paragraph the home State of a company is the country or territory under whose law the company is incorporated.

(4)The reference in sub-paragraph (2) above to the basic profits or losses of the trade for the accounting period shall be construed in accordance with section 93 of the Finance Act 1993.

(2)This section applies in relation to any accounting period beginning on or after the day appointed under section 165(7)(b) below.