Schedule 12
Finance Bill
11:00 am
Ian Pearson (Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
On the question of foreign exchange, the reference in the schedule to “in respect of an asset” will exclude chargeable gains or losses in respect of liabilities such as those arising from forex hedging from the provision. The treatment of such gains and losses within the Exchange Gains and Losses (Bringing into Account Gains or Losses) Regulations is already under consideration in the forex matching discussions that are ongoing between HMRC and business representatives, and we have talked to business representatives about this. We intend to address that point in the next round of forex matching changes later in the year. Proceeding in that way will ensure that the whole regime is considered, rather than that one item being taken out of context. The industry is satisfied with the approach that we are taking.
The hon. Gentleman’s second question was on multiple elections. It is correct that where two or more elections are made simultaneously that specify more than the gain or loss, none of those elections has effect, as a result of the new wording of new section 179A(5). The main issue that the new subsection addresses is the possibility of simultaneous elections where a subsequent election is made in respect of the same gain or loss. HMRC expects that it will be very rare for a group to make such an oversight. On the rare occasions that an oversight may happen, it is right that the group is able to submit correct elections that specify where it wants the gain or loss to go, rather than be subject to a statutory rule that may not achieve the best result on a case-by-case basis.