# The Exchange Gains and Losses (Insurance Companies) (Amendment No. 2) Regulations 1996, Note: Explanatory note


(This note is not part of the Regulations)
These Regulations amend the Exchange Gains and Losses (Insurance Companies) Regulations 1994 (S.I. 1994/3231 amended by S.I. 1996/673) (“the principal Regulations”).
Regulation 1 provides for citation, commencement and effect, and regulation 2 for interpretation.
Regulation 3 inserts a new regulation 5A in the principal Regulations. The new regulation provides that, in any case where, immediately before 1st April 1996, an insurance company holds an asset in exempt circumstances (an expression to be construed in accordance with paragraph 3 of Schedule 17 to the Finance Act 1993), the definition of “relevant qualifying asset” in paragraph 5(8) of Schedule 15 to the Finance Act 1996 (“Schedule 15”and “the 1996 Act”respectively) shall be modified so as to except such an asset from the definition. Provisions in Schedule 15 will accordingly apply on the basis that an asset held by an insurance company in exempt circumstances immediately before 1st April 1996 does not constitute a relevant qualifying asset for the purposes of those provisions.
Regulation 4 makes an amendment to regulation 8 of the principal Regulations consequential upon the insertion, by regulation 5 of these Regulations, of a new regulation 8A in the principal Regulations.
Regulation 5 inserts a new regulation 8A in the principal Regulations. The new regulation provides that an insurance company may elect, in relation to all its regulation 7 assets, that on the disposal of those assets the amount of the chargeable gains or allowable losses shall not be calculated in accordance with regulation 8 of the principal Regulations and sections 117A and 117B of the Taxation of Chargeable Gains Act 1992 (certain assets not to be treated as qualifying corporate bonds), but that Chapter II of Part IV of the 1996 Act (loan relationships), except for paragraph 4 of Schedule 9 to that Act, shall apply to those assets. A regulation 7 asset is one specified in regulation 7 of the principal Regulations, which specifies an asset which represents a loan relationship of a company, is denominated or expressed in a currency other than sterling, and is held in exempt circumstances (construed in accordance with paragraph 3 of Schedule 17 to the Finance Act 1993).

---
Source: https://www.legislation.gov.uk/uksi/1996/1485/note (the official version)
Page: https://openlegislation.uk/exchange-gains-and-losses-insurance-companies-amendment-no-2-regulations-1996/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.