UK Urged to Change Capital Gain Calculation Methods

press release
Tuesday, October 02, 2012
Moore Stephens tax partner Sue Bill.

Moore Stephens calls for rethink on capital gains exchange rate distortions on ships.

 

International accountant and shipping consultant Moore Stephens has urged the UK government to remove exchange rate distortions when calculating capital gains on ships.

 

Moore Stephens tax partner Sue Bill explains, “Currently, all capital gains and losses subject to UK corporation tax are calculated by reference to sterling, with the result that capital gains and losses arising on non-sterling assets, including certain ships, can be significantly distorted by exchange rate fluctuations. For example, even where there is no increase in the dollar or euro value of a ship, a taxable capital gain can arise solely as a result of a fall in the value of sterling. 

 

“In order to avoid such distortions, the UK government has now proposed changes to these rules so that capital gains and losses in some cases can be calculated in a currency other than sterling. Under the proposed changes, where a company has a non-sterling functional currency, capital gains and losses will in future be calculated in the company’s functional currency. But this will only apply to shares and not to physical assets.  

 

“UK resident shipowning companies are subject to potentially very large distortions due to exchange rate fluctuations when calculating capital gains or losses on their ships, although this is less of an issue if there is a capital loss, because relief is likely to be available by way of capital allowances rather than in the form of a capital loss.

 

“These rule changes are not relevant for UK shipowning companies whose ships have all been within the tonnage tax regime throughout the period of ownership by that company. But they are relevant for UK companies that are not in the UK tonnage tax regime, or that have some ships wholly or partly outside tonnage tax. They will also be relevant for companies owning chargeable assets other than ships which are subject to exchange rate fluctuations by reference to sterling.” 

 

The closing date to comment on the UK government’s proposals is 15 October 2012. Moore Stephens has made representation to the government that the proposed changes to the existing rules should apply to ships as well as to shares, so that any calculations are made in the company’s functional currency.
 

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Lukoil Shipped Canadian Crude from Houston

Russian oil major Lukoil has emerged as one of the first companies to buy Canadian crude re-exported from a U.S. port, shipping one cargo last month to its refinery in Augusta,

Vestas Profit Beats Forecast

Danish wind turbine maker Vestas Wind Systems posted much higher than expected second-quarter earnings and slightly increased its guidance for the full year, signaling

MV Cape Ray Signals DTRA 'Mission Complete'

The Defense Threat Reduction Agency announces the successful completion of the Cape Ray's mission to destroy Syria's chemical weapons components at sea. The Defense Threat Reduction Agency/U.

Finance

Lukoil Shipped Canadian Crude from Houston

Russian oil major Lukoil has emerged as one of the first companies to buy Canadian crude re-exported from a U.S. port, shipping one cargo last month to its refinery in Augusta,

Vestas Profit Beats Forecast

Danish wind turbine maker Vestas Wind Systems posted much higher than expected second-quarter earnings and slightly increased its guidance for the full year, signaling

HK's COSCO International Reports Strong Profit Growth

For the  six months ended 30th June 2014, shipping services provider COSCO International has announced that its 2014 Interim Results show strong profit growth with Net Profit up 45% YOY.

Government Update

Lukoil Shipped Canadian Crude from Houston

Russian oil major Lukoil has emerged as one of the first companies to buy Canadian crude re-exported from a U.S. port, shipping one cargo last month to its refinery in Augusta,

Russia Conducts High North Geophysical Surveys

For the first time, as part of the Arctic-2014 high-latitude expedition, nuclear icebreakers 'Akademik Fedorov' and 'Yamal' have conducted an entire complex of geophysical research at the North Pole,

BOEM to Open Bids for Gulf of Mexico Lease Sale

The Bureau of Ocean Energy Management (BOEM) Gulf of Mexico Regional Director John Rodi will open the Gulf of Mexico Western Planning Area Lease Sale 238 at 9 a.

Consulting

Private Equity Knocks on Shipping's Door

Shipping is currently attracting a great deal of interest from investors in the private equity sector, according to UK-based accountants Moore Stephens, members

Clarksons Report Strong First Half Performance

Leading shipping services group Clarkson PLC (Clarksons) has reported its unaudited Interim Results for the six months ended 30, June 2014. Summary     •

Capesize Rates to Rise Much Higher this Year

According to Commodore Research & Consultancy, capesize rates ended last week at $15,561/day, which marked a week-on-week increase of $6,167 (66%). Capesize rates

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Offshore Oil Pipelines Port Authority Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2765 sec (4 req/sec)