1

For the purposes of section 85B(3) of the Finance Act 1996 (amounts recognised in determining company’s profits and loss) the amounts described in paragraph (2) are prescribed in relation to a company which is party to a creditor relationship to which—

a

either—

i

section 92 (convertible securities etc: creditor relationships)7, or

ii

section 93 (relationships linked to the value of chargeable assets)8,

of the Finance Act 1996 applied immediately before the start of the first accounting period of the company to begin on or after 1st January 2005, and

b

section 94A of the Finance Act 1996 (loan relationships with embedded derivatives)9 applies in the first accounting period of the company to begin on or after 1st January 2005.

1A

Where paragraph (1) does not apply, for the purposes of section 85B(3) of the Finance Act 1996 the amounts described in paragraph (3) are prescribed in relation to a company which is party to a creditor relationship to which—

a

section 92, or

b

section 93,

of the Finance Act 1996 applies immediately before the start of the first accounting period of the company to begin on or after 1st January 2005.