In section 434A(1) of the Taxes Act 1988 (limitations on loss relief and group relief), for the words from “under” to “Part X” there shall be substituted the following paragraphs—

“(a)

under Chapter II (loss relief) or Chapter IV (group relief) of Part X, or

(b)

under Chapter II of Part II of the Finance Act 1993 so far as it has effect in relation to losses treated as non-trading losses for the purposes of section 160 of the Finance Act 1994,”.

In Schedule 27 to that Act (distributing funds) in paragraph 5 (United Kingdom equivalent profits) the following sub-paragraph shall be substituted for sub-paragraph (2A)—

“(2A)

In applying sub-paragraph (1) above the effect of the following shall be ignored, namely—

(a)

sections 125 to 133 of the Finance Act 1993 (exchange gains and losses), and

(b)

sections 159 and 160 of, and paragraph 1 of Schedule 18 to, the Finance Act 1994 (treatment of profits and losses on interest rate and currency contracts).”