Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 20044
1
Amend regulation 3 (exchange gains or losses arising from liabilities or assets hedging shares etc.) as follows.
2
After paragraph (1) insert—
1A
For the purposes of paragraph (1) a liability representing a loan relationship does not include any liability representing a relationship within section 100(1) of the Finance Act 19967.
3
In paragraph (2) after “value” insert “, or profits or losses arising on the disposal,”.
4
In paragraph (3)—
a
for the first sentence substitute—
Shares, ships or aircraft are matched to the greatest possible extent with—
- a
the liability representing the loan relationship designated as a hedge if condition 1 is satisfied;
- b
subject to paragraph (a), the liability representing the loan relationship referred to in condition 2 if that condition is satisfied;
b
omit condition 1;
c
in condition 3—
i
for “could” substitute “intends”;
ii
after “into” insert “and continuing to be subject to”; and
iii
omit “reasonably expect”;
d
renumber—
i
condition 2 as condition 1, and
ii
condition 3 as condition 2.
5
In paragraph (4)—
a
for “condition 3” substitute “condition 2”; and
b
after “into” insert “or, if later, when the asset is acquired”.