Moore Stephens Rues Missed Opportunity

Monday, December 17, 2012

International accountant and shipping consultant Moore Stephens says it is regrettable that changes announced for inclusion in the UK Finance Bill 2013 have failed to remove exchange rate distortions from the calculation of capital gains on ships.
 

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.  


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. The rule changes 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.


Moore Stephens tax partner Sue Bill explains, “To its credit, the UK government has acted to remove exchange rate distortions in respect of capital gains on shares.  It has also acknowledged representations made in respect of oil industry assets, engines, and aircraft, as well as ships and has noted that this is an area which could form the basis of further work. But it has not yet acted to remove exchange rate distortions when calculating capital gains on ships. Moore Stephens 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. Despite this, the proposed rules for the Finance Bill 2013, which were published on 11 December, still only relate to shares.”  

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

Energy

Pile Testing for Wikinger Wind Farm Launched

In October 2014 the first phase of the pile testing campaign for the Wikinger offshore wind farm project was launched after the site’s geotechnical investigation on the Baltic Sea had been completed.

Damen, Palfinger Upgrade North Sea Jack-Up Rig

With the support of Palfinger systems JUMP technology, Damen Shiprepair Vlissingen has completed an upgrade of a Keppel Fels ‘N’ Class drilling rig, one of the largest in the North Sea,

Russian Liftings for Western Options at 12-Year Low

By Gleb Gorodyankin MOSCOW, Nov 25 (Reuters) - Exports of Russian crude oil to Western markets are set to fall by almost a third in December and reach a 12-year

News

What’s All the Noise at IMO?

Shipping may think they hear the sound of new regulations as they are slammed onto their desks.  What is all the noise concerning noise at IMO?  This may very well be the question from ship owners,

World’s Largest Containership First Tested at MARIN

MARIN was delighted to take part in a truly historic milestone in the industry when Daewoo Shipbuilding and Marine Engineering (DSME) asked MARIN to investigate

ICS Addresses OECD Shipbuilding Working Party

The OECD should be cautious about becoming involved in the question of what constitutes an ‘eco-ship’, the International Chamber of Shipping (ICS) said to governments

Government Update

Will Congress Pass Any Maritime Legislation in 2014?

Following its usual summer break over August 2014, Congress came back from its five-week summer recess and spent a whopping eight days or so back in session before recessing once again,

ICS Addresses OECD Shipbuilding Working Party

The OECD should be cautious about becoming involved in the question of what constitutes an ‘eco-ship’, the International Chamber of Shipping (ICS) said to governments

The Legal Consequences of 46 CFR Subchapter “M”

As the holiday season and the end of another year quickly approaches, the towing industry patiently waits for the Coast Guard to finalize the long-awaited towing vessel inspection rule.

Logistics

Russian Liftings for Western Options at 12-Year Low

By Gleb Gorodyankin MOSCOW, Nov 25 (Reuters) - Exports of Russian crude oil to Western markets are set to fall by almost a third in December and reach a 12-year

Frontline Disappoints with Deeper 3Q Loss

Frontline, once the world's biggest crude oil tanker company, reported a bigger than expected third-quarter loss on Tuesday and said it is still considering options

Greece Deploys Frigate to Stricken Rescue Ship

Greece has sent a frigate to rescue a container ship believed to carrying hundreds of undocumented migrants and in distress off its southern island of Crete, the Greek coastguard said on Tuesday.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Ship Electronics Shipbuilding / Vessel Construction
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: 0.1980 sec (5 req/sec)