Statutory Instruments
2007 No. 948
corporation tax
The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2007
Made
21st March 2007
Laid before the House of Commons
21st March 2007
Coming into force
11th April 2007
Citation, commencement and effect
1. —(1) These Regulations may be cited as the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2007 and shall come into force on 11th April 2007.
(2) These Regulations have effect in relation to periods of account ending on or after 11th April 2007.
This is subject to paragraph (3).
(3) Where a company ceased to be party to a debtor relationship to which regulation 12(1)(a)(i) of the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 applies before 11th April 2007 regulation 6 shall not apply in respect of that relationship.
Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004
2. Amend the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004( 4 ) as follows.
3. —(1) Amend regulation 4A (relevant value)( 5 ) as follows.
(2) in paragraph (2)(c)(i)—
(a) for “the first” substitute “an”;
(b) after “2005” insert “(“the new period”)”.
(3) In paragraph (3) for the words from “its” to the end substitute “the new period”.
4. In regulation 5 (regulations 3 and 4: supplementary), in paragraph (2) in sub-paragraphs (a) and (b) for “third condition” substitute “condition 2”.
5. —(1) Amend regulation 6 (rules about fair value profits and losses)( 6 ) as follows.
(2) In paragraph (3) at the beginning insert “Except where an election has been made under paragraph (3A)”.
(3) In paragraph (3A)—
(a) for “to” substitute “and”;
(b) in paragraph (a) at the beginning insert “regulation 7 shall not apply, to”;
(c) in paragraph (b) at the beginning insert “regulation 8 shall not apply, to”.
(4) In paragraph (5) after “(5A)” insert “and except where an election has been made under paragraph (5B)”.
(5) In paragraph (6A) for “(5A)” substitute “(5B)”.
6. In regulation 12 (profits and losses arising from loan relationships with embedded derivatives)( 7 ), in paragraph (2)(a) for the words from “debits” to the end substitute
“ all debits and credits in respect of the host contract save for—
debits in relation to interest accruing in respect of the debtor relationship,
credits and debits in respect of discounts, premiums, fees and other incidental costs to the extent that these amounts are not within section 92A(3) of the Finance Act 1996 ( 8 ) , and
debits and credits in respect of exchange gains and losses,
without regard to the amounts given by the effective interest method, and ” .
Frank Roy
Alan Campbell
Two of the Lords Commissioners of Her Majesty’s Treasury
21st March 2007
1996 c. 8 . Section 84A was inserted by paragraph 3 of Part 1 of Schedule 23 to the Finance Act 2002 (c. 23) and subsection (3A) was substituted by paragraph 2(2) of Schedule 10 to the Finance Act 2004 (c. 12) . Section 85B was substituted and inserted by paragraph 3 of Schedule 10 to the Finance Act 2004 and amended by section 80 of, and paragraph 26 of Schedule 4 to, the Finance Act 2005.
2002 c. 23 . Paragraph 16(3A) was substituted by paragraph 48(2), and paragraphs 17C(1) and 17C(3)(b) were substituted by paragraph 50, of Part 2 of Schedule 10 to the Finance Act 2004.
2005 c.7 .
S.I. 2004/3256 , amended by S.I. 2005/2012 , 2005/3374 , 2006/843 , 2006/936 and 2006/3236 .
Regulation 4A was inserted by regulations 2 and 6 of S.I. 2005/3374 .
Regulation 6 was amended by S.I. 2005/2012 , 2005/3374 and 2006/3236 .
Regulation 12 was amended by S.I. 2005/2012 , 2005/3374 and 2006/ 3236 .
Section 92A was inserted by section 76 of the Finance Act 2002, amended by sections 83(1)(b) and (3) and 141 of, and paragraphs 17 and 18 of Schedule 27 and Part 3(13) of Schedule 40 to, that Act and was repealed by sections 52 and 326 of, and paragraph 9 of Schedule 10 and Part 2(6) of Schedule 42 to, the Finance Act 2004.