Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004

5.  In regulation 4 after paragraph (4) insert—

“(4A) For the purposes of paragraph 16(3A) of Schedule 26 to the Finance Act 2002 there is prescribed an exchange gain or loss arising to a company in an accounting period in relation to a derivative contract of the company which is matched with the whole or part of any share capital of the company.

(4B) A derivative contract is matched with share capital in particular where for the accounting period of the company immediately preceding the first accounting period beginning on or after 1st January 2005—

(a) exchange gains and losses on the derivative contract were taken to a reserve; and

(b) set off there against exchange gains and losses on the share capital.”.