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Disregard regs
HMRC has updated its guidance notes setting out the tax implications for companies of adopting international accounting standards.
They are also consulting on proposals to amend the disregard regulations. In particular:
- It is proposed that the amendments to the regulation 9 of the regulations (interest rate contracts used to hedge) would be effective for periods of account beginning on or after 1 January 2005, but the time limit for electing out of the existing regulation 9 and into the proposed new treatment for these contracts would become 31 December 2005.
- There is no proposal to extend the existing deadline of 30 September 2005 for elections under regulation 6(3) (currency, commodity and debt contracts used to hedge).
The Tax Faculty considers that the deadline should be extended, as otherwise companies will be forced to make a decision at 'extraordinarily short notice with no clarity as to what the effects of their actions will be'. This is because the transitional rules relating to changing from generally accepted accounting practice to International Accounting Standard 39 or Financial Reporting Standard 26 are still not clear.
For more details, see www.hmrc.gov.uk/practitioners/int_accounting.htm.
HMRC are also consulting on clarifying the meaning of exchange gains and losses where fair value accounting is used, see www.hmrc.gov.uk/practitioners/fv-egl.htm.
The deadline for responses to both consultations is 14 October.
www.hmrc.gov.uk
