SCHEDULES
SCHEDULE 7Loan relationships and derivative contracts
Exchange gains and losses
9
1
Section 452 (exchange gains and losses where loan not on arm's length terms) is amended as follows.
2
For subsection (3) substitute—
3
Subsections (4) and (5) apply if, because of a claim made under section 192(1) of TIOPA 2010, or because of the claim that is assumed to be made under subsection (2)—
a
one company is treated for any purpose as having a debtor relationship, or
b
more than one company is treated for any purpose as having a debtor relationship represented by the same liability.
3
In subsection (4)—
a
after “exchange gains” insert “
from that debtor relationship (in a subsection (3)(a) case) or
”
;
b
after “those debtor relationships” insert “
(in a subsection (3)(b) case)
”
;
c
for the words from “debits” to the end substitute “
exchange gains or the proportion of the exchange gains to be left out of account under section 447 by the issuing company in respect of the loan relationship
”
.
4
In subsection (5)—
a
after “exchange losses” insert “
from that debtor relationship (in a subsection (3)(a) case) or
”
;
b
after “those debtor relationships” insert “
(in a subsection (3)(b) case)
”
;
c
for the words from “credits” to the end substitute “
exchange losses or the proportion of the exchange losses to be left out of account under section 447 by the issuing company in respect of the loan relationship
”
.
5
After subsection (5) insert—
5A
In this section “issuing company” is to be construed in accordance with section 191(1)(a) of TIOPA 2010.