Finance Act 1996

Adjustments of opening value for mark to market accounting in the case of chargeable assets U.K.

10 (1) Where— U.K.

(a) a mark to market basis of accounting is used as respects any loan relationship of a company for the company’s first relevant accounting period,

(b) for the purpose of bringing amounts into account for the purposes of this Chapter on that basis, an opening valuation of an asset representing that relationship falls to be made as at 1st April 1996, and

(c) that asset is a chargeable asset held by that company on 31st March 1996,

the value of that asset on 1st April 1996 shall be taken for the purpose of the opening valuation to be equal to whatever, in relation to a disposal on 31st March 1996, would have been taken to be its market value for the purposes of the 1992 Act.

(2) In this paragraph “chargeable asset”, in relation to a company, means (subject to sub-paragraph (3) below) any asset in the case of which one of the following conditions is satisfied, that is to say—

(a) a gain accruing to the company on a disposal of that asset on 31st March 1996 would have fallen to be treated in relation to the company as a chargeable gain; or

(b) a chargeable gain or allowable loss would be deemed to have accrued to the company on any disposal of that asset on that date.

(3) An asset is not a chargeable asset for the purposes of this paragraph if (disregarding the provisions of this Chapter) it is an asset any disposal of which on 31st March 1996 would have fallen to be regarded for the purposes of the 1992 Act as a disposal of a qualifying corporate bond.