The Finance Act 2002, Schedule 26, Parts 2 and 9 (Amendment No. 2) Order 2005

Amendment of Part 9 of Schedule 26 to the Finance Act 2002

21.—(1) Amend paragraph 45L(1) as follows.

(2) In sub-paragraph (1)—

(a) in paragraph (a) for “derivative” substitute “relevant”;

(b) at the end of paragraph (a), omit “and”;

(c) after paragraph (a) insert—

“(aa) the contract is a derivative contract falling within paragraph 3(1)(a),

(ab) paragraph 45M does not apply in relation to the contract,”;

(d) after paragraph (b) insert—

“, and

(c) no election having effect in relation to the derivative contract is or has been made under sub-paragraph (2A),”;

(e) for “14(3) (non-trading” substitute “14(2) and (3) (trading and non-trading”; and

(f) after “value” insert “of the”.

(3) For sub-paragraph (2) substitute—

“(2) Where sub-paragraph (1) applies, then notwithstanding paragraph 1(2) of this Schedule, profits and losses are to be brought into account for the purposes of the Corporation Tax Acts in relation to the contract mentioned in sub-paragraph (3) of paragraph 2 as if that sub-paragraph did not apply to it.”.

(4) After sub-paragraph (2) insert—

“(2A) A company may elect that this paragraph is not to apply to any of its contracts.

(2B) Any such election—

(a) must be made by giving notice in writing to Her Majesty’s Revenue and Customs,

(b) must be made before the end of the first applicable accounting period of the company, and

(c) is irrevocable.

(2C) For the purposes of sub-paragraph (2B), the “first applicable accounting period” is the first accounting period ending on or after 17th August 2005 in which the conditions in paragraphs (a) to (b) of sub-paragraph (1) are satisfied.”.

(1)

Paragraph 45L was inserted by articles 5 and 10 of S.I. 2004/3270.