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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter July 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Cenac Marine to Christen New Vessel, Donate Barge

A ceremony will be held July 29 at Cenac Marine Services headquarters in, Houma, La. To commemorate the christening of its newest vessel, M/V Quincey Cenac, as

Concordia Maritime Posts Q2 Profit

Facing a “gradually deteriorating market,” Sweden based tanker shipping company Concordia Maritime said it was able to post a profit in Q2 2016 based on high vessel

Brown Named Bureau Veritas Communications Director

Nick Brown has been appointed Bureau Veritas’ new Communications Director, Marine & Offshore Division, the classification society announced.    Brown will take up the post from November 2,

Finance

Gener8 Maritime Net Income Up 91%

Announcing its financial results today for the three and six months ended June 30, 2016 Gener8 Maritime, Inc. reported net income of $38.0 million, or $0.46 basic and diluted earnings per share,

Dynagas 2Q Results Upbeat

The financial results of Greece-based Dynagas LNG Partners LP (DLNG) for Q2 beat Wall Street expectations.    The average estimate of three analysts surveyed

Safe Bulkers Reports Q2 Loss, Expands Fleet

The Athens, Greece-based Safe Bulkers Inc. (SB) has reported a loss of $9 million in its second quarter.  It had a loss of 15 cents per share.   Net revenue for Q2 of 2016 decreased by 18% to $26.

Government Update

China, Russia Navies to hold S. China Sea Drills

China and Russia will hold "routine" naval drills in the South China Sea in September, China's defence ministry spokesman Yang Yujun told a news conference on Thursday.

India Govt, Cochin Shipyard Pact on FY17 Growth Targets

Cochin Shipyard Limited (CSL) has entered into a Memorandum of Understanding (MoU)  with the government of India for the ongoing fiscal under which targets agreed

Cambodia Urged ASEAN to Avoid Words That Escalate Tension

Cambodia advised a grouping of South East Asian nations to avoid using words that "would escalate tension between China and the Philippines" in a weekend statement,

Consulting

Crew Kidnapping Rising in Gulf of Guinea - Dryad

In contrast to the substantial numbers of reported incidents across Southeast Asia and the Indian Ocean in recent years, maritime crime now appears to have stabilised

Friend of the Sea Turns to BMT for Reefer Vessels Certification

BMT Surveys (BMT), a subsidiary of BMT Group, the international maritime design, engineering and risk management consultancy, has been engaged by Friend of the

BMT to Lead Repower for Historic USCG Eagle

BMT Designers & Planners, a subsidiary of BMT Group, an international maritime design, engineering and risk management consultancy, is leading the effort to repower the historic U.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Repair Sonar Winch
rss | archive | history | articles | privacy | 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: 0.1268 sec (8 req/sec)