The Exchange Gains and Losses (Bringing into Account Gains or Losses) (Amendment) Regulations 2013

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Exchange Gains and Losses (Bringing into Account Gains or Losses) Regulations 2002, which provide for exchange gains or losses on loan relationships or derivative contracts which hedge foreign exchange risk from a company’s investment in a foreign enterprise, and which have previously been disregarded for corporation tax purposes, to be brought back into account in specified circumstances.

Section 9C of the Corporation Tax Act 2010 (inserted by section 66 of the Finance Act 2013) makes provision in relation to the currency used in tax calculations of chargeable gains and losses on the disposal of certain assets. These Regulations make equivalent provision in relation to the calculation of the gain or loss arising on a loan relationship or derivative contract used to hedge any foreign exchange risk in relation to such assets.

Regulation 2(2) amends regulation 5, which provides for the calculation of amounts to be brought into account for the purposes of the Taxation of Chargeable Gains Act 1992 to include provision in relation to the currency in which the calculations must be made. Regulation 2(3) amends regulation 8 to make equivalent provision in relation to no gain/no loss disposals.

A Tax Information and Impact Note covering this instrument was published at Budget 2013 on 20 March 2013 and is available on the HMRC website at www.hmrc.gov.uk/thelibrary/tiins.htm. It remains an accurate summary of the impacts that apply to this instrument.