Exchange gains and losses arising from derivative contractsU.K.
16(1)The reference in paragraph 15(1)(a) to the profits and losses arising to a company from its derivative contracts and related transactions includes a reference to exchange gains and losses arising to the company from its derivative contracts.
(2)Sub-paragraph (1) is subject to the following provisions of this paragraph.
[F1(3)Sub-paragraph (1) does not apply to an exchange gain or loss of a company to the extent that it—
(a)arises in relation to a derivative contract whose underlying subject matter consists wholly or partly of currency, or
(b)results from the translation from one currency to another of the profit or loss of part of the company’s business,
and is recognised in the company’s statement of recognised gains and losses or statement of changes in equity.
(3A)Sub-paragraph (1) above does not apply to so much of an exchange gain or loss arising to a company, in relation to a derivative contract whose underlying subject matter consists wholly or partly of currency, as falls within a description prescribed for the purpose in regulations made by the Treasury.]
F2(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8)The Treasury may by regulations make provision for or in connection with bringing into account in prescribed circumstances amounts in relation to which sub-paragraph (1) does not, by virtue of sub-paragraph (3) [F3or (3A)], have effect.
(9)The reference in sub-paragraph (8) to bringing amounts into account is a reference to bringing amounts into account—
(a)for the purposes of this Schedule, as credits or debits arising to a company from its derivative contracts and related transactions; or
(b)for the purposes of the Taxation of Chargeable Gains Act 1992 (c. 12).
(10)Any power to make regulations under this paragraph includes power to make different provision for different cases [F4and power to make provision subject to an election or to other prescribed conditions].
Textual Amendments
F1Sch. 26 para. 16(3)(3A) substituted for Sch. 26 para. 16(3) (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 48(2)
F2Sch. 26 para. 16(4)-(7) repealed (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 48(3), Sch. 42 Pt. 2(6)
F3Words in Sch. 26 para. 16(8) inserted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 48(4)
F4Words in Sch. 26 para. 16(10) added (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 48(5)
Modifications etc. (not altering text)
C1Sch. 26 applied by 1988 c. 1, s. 440(2B) (as amended (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 70)
C2Sch. 26 modified by 1996 c. 8, s. 94A (as inserted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 13)