Section 9A — Corporation Tax Act 2010: Designated currency of a UK resident investment company

Designated currency of a UK resident investment company 9A 1 The designated currency of a UK resident investment company is the currency which the company elects as its designated currency.

2 An election under this section by a company (“X”) takes effect only if, at the time when it is to take effect (see section 9B(1))—

a X is a UK resident investment company, and b Condition A or Condition B is met. 2A For the purposes of determining whether an election under this section takes effect, ignore the effect (if any) of Part 4 of TIOPA 2010 (transfer pricing). 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Condition A is that a significant proportion of X's assets and liabilities are denominated in the currency.

5 Condition B is that—

a the currency is the functional currency of another company, and b it is reasonable to assume that the two companies will meet the consolidation condition.

6 X and another company (“Y”) meet the consolidation condition at any time if—

a for a period which includes that time, the financial results of X are comprised in financial statements of Y's group prepared in accordance with acceptable accounting practice, or b if no financial statements of the group are prepared in accordance with acceptable accounting practice for a period which includes that time, the financial results of X would be comprised in financial statements of Y's group for a period which includes that time if such statements were prepared in accordance with international accounting standards.

7 In subsection (6)— “ financial statements of the group ” means consolidated financial statements of Y and its subsidiaries (and for this purpose “ subsidiaries ” has the meaning given by international accounting standards) , “ Y's group ” means a worldwide group of which Y is the ultimate parent within the meaning of Part 10 of TIOPA 2010, “ acceptable accounting practice ” means— international accounting standards, UK generally accepted accounting practice, or accounting practice which is generally accepted in the country in which Y is resident.

8 A currency is the designated currency of X for a period of account if the election in respect of that currency has effect throughout that period (see section 9B).

9 In relation to any period of account for which a currency is X's designated currency as a result of an election under this section, profits or losses of X that fall to be calculated in accordance with generally accepted accounting practice for corporation tax purposes must be calculated as if—

a the designated currency were the functional currency of the company, and b no part of X's business could, in accordance with generally accepted accounting practice, be regarded as having another currency as its functional currency.