Regulation 7 Amendment of the principal Regulations

(1)

For regulation 5 (currency elections) substitute—

“Accounting in foreign currencies and relevant discount rates

5.

(1)

In respect of that part of a general insurer’s business to which subsection (1) of section 747A of the Taxes Act^f1 applies, any calculation required under these Regulations shall be made in the same currency as that required to be used, for the purposes of Chapter 4 of Part 17 of the Taxes Act, by subsection (2) of that section.

(2)

In respect of that part of a general insurer’s business to which section 93A of the Finance Act 1993^f2 applies, so much of any calculation required under these Regulations as relates to business in respect of which financial statements and records are prepared in the relevant foreign currency (within the meaning of that section) shall be made in that currency.

(3)

In respect of that part of a general insurer’s business to which section 93 of the Finance Act 1993^f3 applies—

(a)

any calculation required under these Regulations shall be made in the relevant foreign currency (within the meaning of that section); and

(b)

the exchange rate to be used for determining the sterling equivalent of the amount of the receipt or expense found under Rule 9.3 is the London closing exchange rate.

(4)

In respect of so much of general insurer’s business as does not fall within the previous provisions of this regulation section 94AA of the Finance Act 1993 shall apply to the calculation of an excess or deficiency under regulation 3 as it applies to a computation under section 92(1) of that Act.

(5)

If the foreign currency used in the calculations under paragraphs (1) to (3) is one of the currencies mentioned in paragraph (b) of Rule 5.4, the discount rate to be applied to those calculations shall be found in accordance with the formula in that paragraph, and in any other case shall be found in accordance with the formula in paragraph (a) of Rule 5.4.”.

This substitution is subject to the qualification in paragraph (2).

(2)

Notwithstanding the substitution made by paragraph (1)—

(a)

an election may be made before 31st December 2003 under regulation 5(1) as it stood immediately before the substitution; and

(b)

if such an election is made (whether before or after the coming into force of these Regulations) the currency chosen under regulation 5(5) of the principal Regulations as it stood before the substitution may continue to be used as it might have been had the substitution not occurred.

Annotations

Footnotes

f1: Section 747A was inserted by paragraph 2 of Schedule 25 to the Finance Act 1995 (c. 4). It was amended by paragraph 1 of Schedule 36, and partly repealed by the relevant entry in Part V of Schedule 41, to the Finance Act 1996 (c. 8), and further amended by paragraph 2 of Schedule 17 to the Finance Act 1998 (c. 36) and paragraph 19 of Schedule23 to the Finance Act 2002 (c. 23).
f2: Section 93A was inserted by paragraphs 1 and 4 of Schedule 24 to the Finance Act 2002.
f3: 1993 c. 34. Section 93 was substituted by section 105 of the Finance Act 2000 (c. 17), amended by paragraph 89 of Schedule 2 to the Capital Allowances Act 2001 (c. 2) and paragraphs 1 and 3 of Schedule 24 to the Finance Act 2002 and partly repealed by Part 3(11) of Schedule 40 to the Act of 2002.