Section 15 — Corporation Tax Act 2010: Carried-forward amounts

Carried-forward amounts 15 1 This section applies if conditions A, B and C are met.

2 Condition A is that, in accordance with generally accepted accounting practice, a UK resident company—

a prepares its accounts for a period of account in sterling, or b prepares its accounts for a period of account in a currency other than sterling and in those accounts identifies sterling as its functional currency.

3 Condition B is that a loss of the company for that period (“the loss”) which falls to be calculated in accordance with generally accepted accounting practice for corporation tax purposes is to be a carried-forward amount.

4 Condition C is that the tax calculation currency of the company in the accounting period to which the loss is to be carried forward (“the later tax calculation currency”) is a currency other than sterling.

5 The loss must be adjusted by—

a first being translated into the later tax calculation currency by reference to the spot rate of exchange for the first day of the relevant accounting period, and b then being translated into sterling by reference to the same rate of exchange as that at which the profit against which the carried-forward amount is to be set off is required to be translated under section 11.

6 In this section “ the relevant accounting period ” means the earliest accounting period of the company that both—

a begins after the accounting period in which the loss arises, and b is a period in which the tax calculation currency of the company is the currency mentioned in subsection (4).