EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations amend the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 (S.I. 2004/3256; “the principal Regulations”) which allow certain profits and losses from loan relationships and derivative contracts to be left out of account, to be brought into account in a different way or to be brought into account at a later date.
Regulation 1 provides for citation, commencement and effect.
Regulation 2 introduces the amendments to the principal Regulations.
Regulation 3 amends regulation 2 (interpretation) to insert paragraph (3A) to clarify when an asset representing a loan relationship or a derivative contract is treated as matched for the purposes of the principal Regulations.
Regulation 4 amends regulation 3 (exchange gains or losses arising from liabilities or assets hedging shares etc) to clarify the proportion of exchange gains or losses that are left out of account where the matched shares, ships or aircraft are not matched throughout the period for which a company is party to the loan relationship.
Regulation 5 amends regulation 4 (exchange gains or losses arising from derivative contracts hedging shares etc) to make equivalent amendments in respect of derivative contracts.
A Tax Information and Impact Note covering this instrument will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.