UK proposes regulations on taxation of corporate debt and derivative contracts

The UK’s HM Revenue and Customs on October 2 released four sets proposed regulations governing taxation of corporate debt and derivative contracts.

The government said the rules are mostly minor adjustments made on account of legislation introduced by sections 31 and 33 of Finance (No.2) Act 2015.

The more substantive changes include rules designed to ensure that amounts of exchange gains and losses on a loan or derivative as part of a designated fair value hedge are not brought into account on disposal of the foreign operation, and modifications to rules on own credit risk, HMRC said.

A consultation on the proposed regulations will run until October 30.

See:

• Exchange Gains and Losses (Bringing into Account Gains and Losses) (Amendment) Regulations 2015

• Loan Relationships and Derivative Contracts (Disregard and Bringing into Account Profits and Losses) (Amendment) Regulations 2015

• Loan Relationships and Derivative Contracts (Change of Accounting Practice) (Amendment) Regulations 2015

• Loan Relationships and Derivative Contracts (Exchange Gains and Losses using Fair Value Accounting) (Amendment) Regulations 2015

• Explanatory memorandum