FX Accounting Practices

In addition to the risk management services that we provide, our team has worked tirelessly to extend our product offering to cater for all of our client’s needs. As such, we have partnered with leading institutions from across the UK to deliver services that go above and beyond that of our competitors.

Trident Tax are tax specialists who provide high-quality tax advice for companies, individuals and trusts. We have worked alongside them to simplify the difficulty of the UK tax system, particularly how it fits alongside your FX requirements. This page presents some of the things you need to consider, but if you have any further questions please do not hesitate to get in touch with our team by emailing [email protected].

Tax-efficient structuring of international expansion

All businesses want to grow and as you develop your business internationally, you will need to consider the taxation regimes in other countries as well as the UK. We all know how complex tax can be, especially on our shores, and expanding internationally throws a few more spanners into the works. For instance, it is vital that you know whether your company has triggered a taxable presence in another country and, if so, what claims you need to make to ensure that your company does not suffer tax on the same profits in two countries.

You have several choices, such as whether to set up overseas subsidiaries or use an overseas office within your UK company. Then there are decisions on how to structure finance between UK companies and group companies outside the UK.

Unsurprisingly, this particular area is extremely complex and ever-changing; an entrepreneurial business expanding overseas can be caught by anti-avoidance legislation. That is why we have partnered with Trident Tax, as they are able to provide expert and practical guidance. The team there is composed of experienced specialists with strong backgrounds from HMRC which perfectly positions them to help you navigate a safe path as you move forwards.

Investing in non-sterling assets

As you expand and diversify your investments, you might acquire assets which are valued beyond the UK. For instance, you might purchase an overseas home, or a yacht or specialist car. You might start collecting art and antiques – valuables that reflect international interest.

We can offer a helping hand in calculating gains for tax purposes and establish whether another country has the right to tax your gains. You might require advice on ensuring that your will minimises the inheritance tax costs in different countries for your heirs.

Or you might need guidance for something else entirely. The point is that our specialist partners have years of experience, particularly in advising wealthy international families. So if you have ambitions to grow your business internationally, or are already in the process of doing so, drop us a line and we’ll be in touch to make this exciting journey run as smooth as possible.

FRS 102 rules put spotlight on currency exchange rate risk

As of 2016/2017 Accounting Rules for Reporting Forward Foreign Currency Contracts New Financial Reporting Standard (FRS) 102 rules have changed.

Gains or losses on these forward contracts now need to be stated on the year-end balance sheet as an asset or a liability. The value is calculated as the difference between the contracted forward rate and the forward rate at year-end.

How currency exchange rate risk affects your bottom line

As you’ll have to declare any currency gains or losses made, you’ll instantly see how movements in the currency market as well as your currency risk management processes affect your balance sheet.

More importantly, this will help you assess whether or not your risk management strategy is fit for purpose. You can then make the necessary changes to protect your business’s margins going forward.