In Smith & Nephew, the FTT decided that losses incurred as a result of a change in functional currency were allowable. The case is a rare example of a UK corporate taxpayer succeeding in an argument about loan relationships or financial instruments against HMRC. However, it is only an FTT decision; and, in particular, it was released just a few days before the Upper Tribunal decision in GDF Suez Teesside Ltd, which may well undermine the conclusions in Smith & Nephew.
