Finance Act 2016

Exchange gains and losses

9 (1) Section 452 (exchange gains and losses where loan not on arm’s length terms) is amended as follows.

(2) For subsection (3) substitute—

“(3) Subsections (4) and (5) apply if, because of a claim made under section 192(1) of TIOPA 2010, or because of the claim that is assumed to be made under subsection (2)—

(a) one company is treated for any purpose as having a debtor relationship, or

(b) more than one company is treated for any purpose as having a debtor relationship represented by the same liability.”

(3) In subsection (4)—

(a) after “exchange gains” insert “from that debtor relationship (in a subsection (3)(a) case) or”;

(b) after “those debtor relationships” insert “(in a subsection (3)(b) case)”;

(c) for the words from “debits” to the end substitute “exchange gains or the proportion of the exchange gains to be left out of account under section 447 by the issuing company in respect of the loan relationship”.

(4) In subsection (5)—

(a) after “exchange losses” insert “from that debtor relationship (in a subsection (3)(a) case) or”;

(b) after “those debtor relationships” insert “(in a subsection (3)(b) case)”;

(c) for the words from “credits” to the end substitute “exchange losses or the proportion of the exchange losses to be left out of account under section 447 by the issuing company in respect of the loan relationship”.

(5) After subsection (5) insert—

“(5A) In this section “issuing company” is to be construed in accordance with section 191(1)(a) of TIOPA 2010.”