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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Foreign exchange: matching under the Disregard Regulations: regulation 3: matching using loan relationships

When does regulation 3 apply?

Regulation 3 deals with loan relationship liabilities matched with shares, ships or aircraft (provided they are not held for trading) and, more rarely, loan relationship assets matched with shares.

It does not relate to liabilities that are money debts (such as a trade debt) on which exchange differences are brought within CTA09/S481.

In order for liabilities to be matched to shares, ships or aircraft either Condition 1 or 2 under regulation 3(3) must apply - see CFM62640.

For the conditions for matching of assets with a company’s own shares see CFM62850.