The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2015
| Jurisdiction | UK Non-devolved |
| Citation | SI 2015/1961 |
2015No. 1961
CORPORATION TAX
The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2015
3rdDecember2015
7thDecember2015
31stDecember2015
The Treasury make the following Regulations in exercise of the powers conferred by sections 310(1)(a) and (3), 328(4), 598(1)(a), (4) and (5) and 606(4) of the Corporation Tax Act 2009( 1).
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 2015 and come into force on 31st December 2015.
(2) These Regulations have effect in relation to accounting periods beginning on or after 1st January 2016.
Amendments to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004
2. The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004( 2) are amended as follows.
3. In regulation 2 (interpretation), in paragraph (1)-
(a) omit the definition of "fair value accounting",(b) for the definition of "fair value profit or loss" substitute-""fair value profit or loss" means the profit or loss brought into account in relation to a derivative contract or an asset or liability representing a loan relationship where for the period in question-
(a) the derivative contract or asset or liability representing a loan relationship is measured at fair value, or(b) the derivative contract or asset or liability representing a loan relationship is a hedged item in a designated fair value hedge and the carrying value of the hedged item is adjusted for changes in fair value attributable to the hedged risk;", and(c) in paragraph (2), in the list of terms that have the same meaning as for accounting purposes, after "foreign operation" insert ", fair value, items of other comprehensive income".4. After regulation 5 insert-
"Net investment hedge of foreign operations
5A.
-(1) For the purposes of sections 328(4) and 606(4) of CTA 2009 there is prescribed an exchange gain or loss arising to a company in an accounting period in relation to a liability representing a loan relationship or derivative contract of the company where-(a) the loan relationship or derivative contract is a designated hedge of a net investment in a foreign operation of the company, and(b) amounts representing exchange gains or losses in respect of the loan relationship or derivative contract have, in accordance with generally accepted accounting practice, been recognised in the company's accounts as items of other comprehensive income.(2) In determining what amounts fall within paragraph (1)(b) at any time in an accounting period, it is to be assumed that the accounting policy applied in drawing up the company's accounts for the period was also applied in previous accounting periods.(3) But if the company's accounts for the period are, in accordance with generally accepted accounting practice, drawn up on an assumption as to the accounting policy in previous accounting periods which differs from that mentioned in paragraph (2), that different assumption applies in determining what amounts fall within paragraph (1)(b) at the time in question."5. In regulation 6A (election to apply regulations 7, 8...
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