8(1)Subject to sub-paragraph (2) below, this Schedule shall not require the amounts brought into account in any person’s case under—
(a)Chapter II of Part II of the M1Finance Act 1993 (foreign exchange gains and losses), or
(b)Chapter II of Part IV of the M2Finance Act 1994 (financial instruments),
to be computed in that person’s case on the assumption that the arm’s length provision had been made or imposed instead of the actual provision.
(2)Sub-paragraph (1) above—
(a)shall not affect so much of sections 136 and 136A of the M3Finance Act 1993 (application of arm’s length test) as has effect by reference to whether the whole or any part of a loan falls to be treated in accordance with this Schedule as an amount on which interest has been charged or, as the case may be, has been charged at a higher rate; and
(b)accordingly, shall not prevent the assumption mentioned in that sub-paragraph from determining for the purposes of sections 136(8) and (9) and 136A(6) and (7) of that Act how much (if any) of any loan falls to be so treated.