The Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2007

• Citation: S.I. 2007/948
• Sections: 6

Section 1 Citation, commencement and effect

(1) These Regulations may be cited as the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) (Amendment) Regulations 2007 and shall come into force on 11th April 2007.

(2) These Regulations have effect in relation to periods of account ending on or after 11th April 2007.

This is subject to paragraph (3).

(3) Where a company ceased to be party to a debtor relationship to which regulation 12(1)(a)(i) of the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 applies before 11th April 2007 regulation 6 shall not apply in respect of that relationship.

Section 2 Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004

Amend the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 as follows.

Section 3 Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004

(1) Amend regulation 4A (relevant value) as follows.

(2) in paragraph (2)(c)(i)—

(a) for “the first” substitute “an”;

(b) after “2005” insert “(“the new period”)”.

(3) In paragraph (3) for the words from “its” to the end substitute “the new period”.

Section 4 Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004

In regulation 5 (regulations 3 and 4: supplementary), in paragraph (2) in sub-paragraphs (a) and (b) for “third condition” substitute “condition 2”.

Section 5 Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004

(1) Amend regulation 6 (rules about fair value profits and losses) as follows.

(2) In paragraph (3) at the beginning insert “Except where an election has been made under paragraph (3A)”.

(3) In paragraph (3A)—

(a) for “to” substitute “and”;

(b) in paragraph (a) at the beginning insert “regulation 7 shall not apply, to”;

(c) in paragraph (b) at the beginning insert “regulation 8 shall not apply, to”.

(4) In paragraph (5) after “(5A)” insert “and except where an election has been made under paragraph (5B)”.

(5) In paragraph (6A) for “(5A)” substitute “(5B)”.

Section 6 Amendment to the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004

In regulation 12 (profits and losses arising from loan relationships with embedded derivatives) , in paragraph (2)(a) for the words from “debits” to the end substitute

all debits and credits in respect of the host contract save for—

debits in relation to interest accruing in respect of the debtor relationship,

credits and debits in respect of discounts, premiums, fees and other incidental costs to the extent that these amounts are not within section 92A(3) of the Finance Act 1996 , and

debits and credits in respect of exchange gains and losses,

without regard to the amounts given by the effective interest method, and