Details of the Schedule
2.Paragraph 1 inserts a new section 465A into the Corporation Tax Act 2009 (CTA), to allow regulations to be made where as a consequence of a “change in accounting standards” there is a “relevant accounting change”.
3.Subsection (2) of new section 465A defines a “change in accounting standards” to mean a change made to an “accounting standard” by an “accounting body”. These terms are defined in subsection (8).
4.Subsection (3) defines a “relevant accounting change” to mean a change in the way a company may or must account for profits and losses that are taxed or relieved under the loan relationships rules in Part 5 of CTA. (By virtue of section 294 of CTA, the provisions of Part 5 also apply to matters treated as loan relationships under Part 6 of CTA.)
5.Subsection (4) allows regulations made under this power to amend the primary legislation on loan relationships.
6.Subsection (5) allows for the regulations to make any necessary consequential and transitional provisions, and to introduce an election.
7.Subsection (6) permits any such consequential changes to include changes in CT provisions outside the loan relationship rules.
8.Subsection (7) allows the regulations to have retrospective effect where a relevant accounting change can be adopted by a company for a period of account beginning before the regulations are made.
9.Subsection (8) defines the terms “accounting body” and “accounting standard”. The term “accounting standards” embraces International Accounting Standards, International Financial Reporting Standards, Statements of Standard Accounting Practice, Statements of Recognised Accounting Practice, Financial Reporting Standards, interpretations issued by the International Financial Reporting Interpretations Committee, and all similar documents.
10.Paragraph 2 inserts a new section 701A in CTA. The provisions of this new section mirror those of new section 465A, and allow equivalent regulations to be made in relation to Part 7 of CTA, which sets out the CT rules on derivative contracts.
11.Paragraph 3 provides for any regulations made under either of the new sections to be subject to the affirmative resolution procedure.