Taxes Consolidation Act 1997 section 697J

Relevant shipping income: foreign currency gains

Section 697J ensures that foreign exchange gains attributable to a company's tonnage tax trade are treated as relevant shipping income.

• The section applies to both realised and unrealised foreign exchange gains on relevant monetary items and relevant contracts (as defined in section 79) that would otherwise form part of the trading income of a tonnage tax trade.
• Where such a gain arises, it is treated as income for the purposes of the definition of "relevant shipping income".
• This means that foreign exchange gains referable to a company's shipping trade, including gains on currency forward contracts, fall within the tonnage tax regime rather than being taxed under normal rules.
• The effect is to keep these gains inside the tonnage tax computation, ensuring they do not create a separate or additional tax charge outside the regime.