The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004

[F1 Election to apply regulations 7, 8 or 9 U.K.

6A.— (1) An election for the purposes of regulation 6(1)(a) must be made by a company by notice in writing to an officer of Revenue and Customs and applies regulations 7, 8 and 9 unless the notice states which of those regulations apply to the company’s derivative contracts.

(2) The election has effect—

(a) in the case of a new adopter where the election is made on or before the later of the dates set out in paragraph (3), in relation to derivative contracts held in the first relevant period and any subsequent period, and

(b) in any other case, in relation to derivative contracts entered into on or after a date specified in the election which must be later than the date the election is made, and in the case of a new adopter cannot be before two years after the end of the first relevant period.

(3) The dates referred to in paragraph (2)(a) are—

(a) the date six months after the start of the first relevant period,

(b) the date six months after the date the company first enters into a relevant derivative contract [F2 which the company measures at fair value], and

(c) in the case of a company which is not a qualifying company for the purposes of Schedule 46 to the Finance Act 2009, the date 12 months after the end of the first relevant period.

(4) An election may be amended or revoked by notice in writing to an officer of Revenue and Customs—

(a) in the case of an election made by a new adopter within paragraph (2)(a), before the later of the applicable dates set out in paragraph (3), or

(b) [F3 either] —

(i) before the election has effect, or

(ii) after the election has effect, in relation to derivative contracts entered into on or after a date specified in the notice which must be later than the date the notice is given, and in the case of a new adopter cannot be before two years after the end of the first relevant period.

(5) For the purposes of this regulation—

(a) a “new adopter” is a company which [F4 measures a relevant derivative contract at fair value for the first time on or after 1st January 2015],

(b) “the first relevant period” is the first accounting period in which a company [F5 measures a relevant derivative contract at fair value [F6 (but see paragraph (6))]],

(c) a “relevant derivative contract” is a derivative contract which satisfies the conditions in regulation 7(1)(a), 8(1)(a) or 9(1).

[F7 (6) For the purposes of the definition of “the first relevant period” an accounting period of a company is to be ignored if—

(a) the accounting period begins solely as a result of a disposal of an asset by the company, and

(b) any gain accruing to the company on the disposal would be chargeable to corporation tax as a result of section 2B(4) of the Taxation of Chargeable Gains Act 1992.]]

Textual Amendments

F1 Regs. 6-6B substituted for reg. 6 (31.12.2014 with effect in accordance with reg. 1(2)(a)(3) of the amending S.I.) by The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2014 (S.I. 2014/3188), regs. 1(1), 6 (with reg. 9)

F2 Words in reg. 6A(3)(b) substituted (31.12.2015 with effect in accordance with reg. 1(2) of the amending S.I.) by The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2015 (S.I. 2015/1961), regs. 1(1), 5(a)

F3 Word in reg. 6A(4)(b) substituted (31.12.2015 with effect in accordance with reg. 1(2) of the amending S.I.) by The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2015 (S.I. 2015/1961), regs. 1(1), 5(b)

F4 Words in reg. 6A(5)(a) substituted (31.12.2015 with effect in accordance with reg. 1(2) of the amending S.I.) by The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2015 (S.I. 2015/1961), regs. 1(1), 5(c)(i)

F5 Words in reg. 6A(5)(b) substituted (31.12.2015 with effect in accordance with reg. 1(2) of the amending S.I.) by The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2015 (S.I. 2015/1961), regs. 1(1), 5(c)(ii)

F6 Words in reg. 6A(5)(b) inserted (with effect in accordance with Sch. 6 para. 11 of the amending Act) by Finance Act 2020 (c. 14), Sch. 6 para. 8(a)

F7 Reg. 6A(6) inserted (with effect in accordance with Sch. 6 para. 11 of the amending Act) by Finance Act 2020 (c. 14), Sch. 6 para. 8(b)