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Chapter 5
Corporation Tax
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Amendment of section 79 of Principal Act (foreign currency: computation of income and chargeable gains)
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38. Section 79 of the Principal Act is amended, in subsection (1)(a)—
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(a) by the substitution of the following definition for the definition of “relevant monetary item”:
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“‘relevant monetary item’, in relation to a company, means—
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(i) a trade receivable of the company,
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(ii) a debt owed by a bank which is represented by a sum standing to the credit of the company in an account in the bank, where the sole purpose of the account is the lodgement and disbursement of amounts that are taken into account in computing profits or losses of a trade carried on by that company,
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(iii) money held by the company for the purposes of a trade carried on by it, or
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(iv) money payable by the company for the purposes of a trade carried on by it;”,
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and
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(b) by the insertion of the following definitions:
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“‘balance sheet’ means a balance sheet, statement of financial position or equivalent prepared in accordance with generally accepted accounting practice;
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‘trade receivable’, in respect of a company, means an amount recorded in the company’s balance sheet as owed to that company in respect of goods or services sold by that company for the purposes of a trade carried on by it;”.
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