Policy paper

Draft Legislation: modernising the taxation of corporate debt and derivative contracts amending Regulations - informal consultation

Proposed amendments to existing Regulations as a consequence of a package of proposals to modernise the taxation of corporate debt and derivative contracts.

Documents

Details

This consultation has now closed.

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: oli.jones@hmrc.gsi.gov.uk or Telephone: 03000 541 970 before the above deadline.

Final Regulations were laid on 7 December 2015 and can accessed at the links below:

The Exchange Gains and Losses (Bringing into Account Gains or Losses) (Amendment) Regulations 2015 - SI 2015/1960

The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2015 - SI 2015/1961

The Loan Relationships and Derivative Contracts (Change of Accounting Practice) (Amendment No. 2) Regulations 2015 - SI 2015/1962

The Loan Relationships and Derivative Contracts (Exchange Gains and Losses using Fair Value Accounting) (Amendment) Regulations 2015 - SI 2015/1963

Explanatory Memorandum

Published 2 October 2015
Last updated 23 February 2016 + show all updates
  1. Links to Final Regulations and Explanatory Memorandum that were laid on 7 December 2015 can now be accessed from this page.
  2. This consultation has now closed.
  3. First published.