Finance Act 2022

Exchange gains

38 (1) The Loan Relationships and Derivative Contracts (Exchange Gains and Losses using Fair Value Accounting) Regulations 2005 (S.I. 2005/3422) are amended as follows.

(2) In regulation 2 (interpretation), after the definition of “loan relationship” insert—

• ““QAHC” has the same meaning as in Schedule 2 to FA 2022;”.

(3) In regulation 5 (exchange gain or loss arising from loan relationship assets or liabilities), after paragraph (3) insert—

“(4) But where paragraph (1) applies in relation to loan relationship assets or liabilities of a QAHC and—

(a) an amount is recognised in the QAHC‘s accounts which arises from comparing at different times the fair value of the asset or liability (or in the case of regulation 5(1)(b) any part of it), and

(b) the change in fair value is attributable to any extent to fluctuations in the spot rate of exchange between the base currency of the QAHC and—

(i) the currency in which the asset or liability is denominated, or

(ii) another currency which is relevant to the value of the asset or liability,

the exchange gain or loss is instead calculated as set out in paragraph (5).

(5) The exchange gain or loss for any accounting period is the change in fair value between the earlier and the later time in that period that is attributable only to fluctuations in the spot rate of exchange between that currency, or those currencies, and the base currency of the QAHC.”