In Smith & Nephew Overseas Ltd v HMRC [2020] EWCA Civ 299 (3 March) the Court of Appeal upheld the decision of the Upper Tribunal that three companies could claim relief for exchange losses arising on loan relationships and were not prevented from doing so by the (now repealed) ‘fairly represent’ requirement.
Three UK-resident subsidiaries in the UK sub-group of a multinational group were involved in an internal restructuring in which they were transferred out of the UK sub-group. As a result of the restructuring the companies changed their functional currencies from sterling to US dollars. At the time of the transfer each held substantial sterling intercompany debt receivables and when preparing their US dollar accounts they recognised large foreign exchange adjustments through non-distributable reserves in their statements of total recognised gains...
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In Smith & Nephew Overseas Ltd v HMRC [2020] EWCA Civ 299 (3 March) the Court of Appeal upheld the decision of the Upper Tribunal that three companies could claim relief for exchange losses arising on loan relationships and were not prevented from doing so by the (now repealed) ‘fairly represent’ requirement.
Three UK-resident subsidiaries in the UK sub-group of a multinational group were involved in an internal restructuring in which they were transferred out of the UK sub-group. As a result of the restructuring the companies changed their functional currencies from sterling to US dollars. At the time of the transfer each held substantial sterling intercompany debt receivables and when preparing their US dollar accounts they recognised large foreign exchange adjustments through non-distributable reserves in their statements of total recognised gains...
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