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The Treasury recently announced that there would be changes to tax legislation ensuring that any exchange gain or loss on a derivative contract entered into to hedge the future proceeds from a rights issue of shares will be disregarded, consistent with the tax treatment of other types of hedging transactions.
The draft statutory instrument relating to such contracts has been published along with the draft explanatory memorandum.
The changes brought about by the draft statutory instrument will amend the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations SI 2004 No 3256).
Comments should be submitted by 21 May to Aidan Reilly or Paul Gilham at CT&VAT Specialist Financial, 3C/03, 100 Parliament Street, London SW1A 2BQ.
