Finance Bill 2002
Amendment: 162
Page: 272
Line: 43
Mr Andrew Smith (Labour, Oxford East)
162
Schedule 23, page 272, line 43, after ?would? insert ?, or would apart from section 84A(2) to (10) of this Act,?.
EXPLANATORY NOTE
SUMMARY
1. The purpose of the amendment is to ensure that exchange gains and losses are correctly dealt with in certain cases where a loan relationship is entered into which would not have been entered into, or not on the same terms, with an arm's length party.
DETAILS OF THE AMENDMENT
2. The amendment inserts additional words in the inserted paragraph 11A(4)(c) of Schedule 9 to the Finance Act 1996. They ensure that a company's exchange gains and losses which are disregarded as a result of the operation of the rules in section 84A FA 1996 still count as gains and losses brought into account.
3. Without this amendment the rule set out in paragraph 11A(4)(c) would result in exchange gains or losses being brought into account by the creditor company simply because gains or losses on the debtor company's loan relationships were subject to the rules on matching exchange gains or losses in accounts provided in the new section 84A of the Finance Act 1996 (which is being inserted by paragraph 3 of Schedule 23 to the Bill).
BACKGROUND
4. The measures included in the Finance Bill as Schedule 23 represent the outcome of a major consultative process between the Government and representatives of, and advisers to, business. Two Consultative documents and a Technical Note have been produced, and two rounds of draft clauses have been published, most recently on 19 December 2001.
5. The amendments arise from representations made after publication of the Bill