Finance Bill 2002
Amendment 157 Page 264 Line 34
Amendment 158 Page 265 Line 1
Mr Andrew Smith (Labour, Oxford East)
157
Schedule 23, page 264 , line 34, after ?business? insert ?and falls within subsection (4) below?.
158
Schedule 23, page 265, line 1, after ?(3)(a)? insert ?or (c)?.
EXPLANATORY NOTE
SUMMARY
1. The purpose of these amendments is to prevent foreign exchange (forex) gains and losses being inappropriately non-taxable or non-relievable if a particular accounting method is used.
DETAILS OF THE AMENDMENTS
2. The first amendment adds words to section 84A(3)(c) FA 1996 (inserted by paragraph 3 Schedule 23 to the Bill) to ensure that gains and losses covered by section 84A(3)(c) are disregarded for tax purposes when they arise only if they are taken to reserves in the company's accounts (as set out in section 84A(4)).
3. The second amendment makes clear that subsection (4) applies for the purposes of subsection 3(c).
BACKGROUND
4. Paragraph 3 of Schedule 23 inserts a new section 84A in the Finance Act 1996 to bring exchange gains and losses, previously taxed under the forex rules in Part 2 Chapter 2 of Finance Act 1993, into the loan relationship rules in Finance Act 1996 where they relate to a company's loan relationships.
5. These amendments have been tabled to correct errors and omissions identified after the Bill was introduced. They will ensure that section 84A has the intended effect in all relevant circumstances.