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

Fair value profits or losses arising from derivative contracts which are currency contracts U.K.

7.— [F1 (1) For the purposes of [F2 section 598(1)(a) of CTA 2009] there is prescribed in relation to a derivative contract whose underlying subject matter consists wholly of currency —

(a) all credits and debits representing the whole or part of a company’s fair value profit or loss in an accounting period if—

(i) there is a hedging relationship between the contract or part of the contract and a forecast transaction or a firm commitment (“the hedged item”) of the company; and

(ii) the hedged item is not one [F3 for which fair value profits or losses are brought into account for the purposes of corporation tax];

(b) a company’s [F4 section 614 or 615 credit or debit] in relation to such a contract, if for the accounting period in which the [F4 section 614 or 615 credit or debit] falls to be brought into account sub-paragraph (a) applies to the contract; and

(c) a company’s prior period adjustment credit or debit in relation to such a contract, if for the accounting period in which the prior period adjustment credit or debit falls to be brought into account sub-paragraph (a) applies to the contract,

and the credits and debits mentioned in sub-paragraphs (a) to (c) together make up the regulation 7 fair value profits or losses.]

F5 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Where there is a hedging relationship between part of a currency contract and a hedged item, the part of the [F6 regulation 7] fair value profit or loss that is prescribed is the part which bears to the whole the proportion which the value of that part of the contract which is in the hedging relationship bears to the value of the whole of the contract.

F7 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F8 (5) Where regulation 4 [F9 or 5ZA] applies to a contract to which this regulation applies, nothing in this regulation or regulation 10 is to require any [F10 amount prescribed under regulation 4 or excluded under 5ZA] in relation to that contract to be brought into account.]

Textual Amendments

F1 Reg. 7(1) substituted (11.8.2005 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 2005 (S.I. 2005/2012), regs. 1(1), 8(2)

F2 Words in reg. 7(1) substituted (31.12.2014) 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), 8(8)(a)

F3 Words in reg. 7(1)(a)(ii) substituted (29.12.2005 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 No. 2) Regulations 2005 (S.I. 2005/3374), regs. 1(1), 8

F4 Words in reg. 7(1) substituted (31.12.2014) 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), 8(9)

F5 Reg. 7(2) omitted (11.8.2005 with effect in accordance with reg. 1(2) of the amending S.I.) by virtue of The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2005 (S.I. 2005/2012), regs. 1(1), 8(3)

F6 Words in reg. 7(3) inserted (11.8.2005 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 2005 (S.I. 2005/2012), regs. 1(1), 8(4)

F7 Reg. 7(4) omitted (31.12.2015 with effect in accordance with reg. 1(2) of the amending S.I.) by virtue of 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), 7(a)

F8 Reg. 7(5) inserted (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), 7(b)

F9 Words in reg. 7(5) inserted (1.4.2022 with effect in accordance with reg. 1(2) of the amending S.I.) by The Disregard and Bringing into Account of Profit and Losses on Derivative Contracts Hedging Acquisitions and Disposals of Shares Regulations 2022 (S.I. 2022/239), regs. 1(1), 2(5)(a)

F10 Words in reg. 7(5) substituted (1.4.2022 with effect in accordance with reg. 1(2) of the amending S.I.) by The Disregard and Bringing into Account of Profit and Losses on Derivative Contracts Hedging Acquisitions and Disposals of Shares Regulations 2022 (S.I. 2022/239), regs. 1(1), 2(5)(b)

Commencement Information

I1 Reg. 7 in force at 1.1.2005, see reg. 1(1)