At Budget 2013, the government announced consultation on a package of proposals to modernise the Corporation Tax rules governing the taxation of corporate debt and derivative contracts, with a view to legislating in Finance Bill 2014 and Finance Bill 2015. This work supports the government’s aim of promoting a tax system which is efficient, competitive, predictable, simple and fair. As a result of the changes being made to primary legislation, certain consequential amendments are needed to the following existing Regulations:
Exchange Gains and Losses (Bringing into Account Gains and Losses) Regulations (S.I. 2002 /1970)
Loan Relationships and Derivative Contracts (Disregard and Bringing into Account Profits and Losses) Regulations (S.I. 2004 / 3256)
Loan Relationships and Derivative Contracts (Change of Accounting Practice) Regulations (S.I. 2004 / 3271)
Loan Relationships and Derivative Contracts (Exchange Gains and Losses using Fair Value Accounting) Regulations (S.I. 2005 / 3422)
The majority of changes are minor adjustments as a result of following the amount of profit or loss in commercial accounts and changes in terminology. There are, however, also changes to areas such as foreign branches of UK companies and own credit risk.
HM Revenue and Customs has published draft regulations, together with a draft explanatory memorandum, for a period of technical consultation which will close on Friday 30 October 2015.
Any comments on this draft should be sent to Oli Jones by email: firstname.lastname@example.org or Telephone: 03000 541 970 before the above deadline.
Final Regulations were laid on 7 December 2015 and can accessed at the links below: