[CFM62620] CFM62620 – Foreign exchange: matching under the Disregard Regulations: why special rules are needed
Special rules needed
Special tax rules are needed to make this work because shares and loan relationships are normally taxed in a different way. An exchange gain or loss on a loan relationship is taxed each year whilst the exchange gain or loss on the shares is taxed, if at all, on disposal. In practice, many share disposals will not constitute chargeable gains because of the substantial shareholding exemption.