Taxation of loan relationships and derivative contracts / David Southern.

Format:

Book

Author/Creator:

Southern, David, author.

Language:

English

Subjects (All):

Corporate debt--Law and legislation--Great Britain.

Corporate debt.

Financial instruments--Taxation--Law and legislation--Great Britain.

Financial instruments.

Derivative securities--Taxation--Law and legislation--Great Britain.

Derivative securities.

Physical Description:

1 online resource (717 pages)

Edition:

Tenth edition.

Place of Publication:

London, England : Bloomsbury Professional, [2017]

System Details:

Mode of access: World Wide Web.

Summary:

Taxation of Loan Relationships and Derivative Contracts, Tenth Edition, is updated in line with the Finance Act 2015 which brings in significant changes to the loan relation rules. In addition, it includes changes to both UK and International Accounting Standards. This new edition covers developments in the Basic Erosion and Profit Shifting (BEPs) project and the related new climate and wider concept of tax avoidance (GAAR). The chapters covering accounting framework, reorganisations and international aspects have been significantly updated since the previous edition and new chapters have been added with a summary of all relevant cases and a chapter covering Islamic Finance.Covers the following:The Taxation of Finance Accounting under IFRS and Modified UK GAAP The Scheme of the Legislation Loan Relationships: Scope and Definition Loan Relationships: General Computational Provisions Loan Relationships: Special Computational Provisions Impairment Losses Foreign Exchange and Hedging/DeferralInterest SecuritiesReorganisations, Acquisitions and Disposals Special CompaniesDerivative Contracts - Definition and Scope Derivative Contracts - Measurement of Profits Embedded Derivatives Worldwide Debt Cap Transfer PricingStock Lending and ReposInternational AspectsIslamic FinanceCasesAppendices

Contents:

Intro

Taxation of Loan Relationships and Derivative Contracts

Preface

Contents

Table of statutes

Table of statutory instruments

Table of cases

Abbreviations and references

Glossary

Chapter 1

The Taxation of Finance

Overview

Corporate finance

Law and accounting

UK tax regime

Equity

Debt

Hybrid securities

Quasi-equity

Derivatives

Structured instruments

Foreign exchange differences

Chapter 2

The Accounting Framework

Introduction

Company law provisions

The true and fair requirement

Accounting regulators

Adoption of IFRS within Europe

UK convergence programme

Accounting bases

FRS 102

Definition of financial instruments

Classification of financial asset/liability

Basic financial instruments

Recognition and derecognition

Non-basic financial instruments

Summary

Debt/equity classification

Comparison of IFRS (FRS 101) and FRS 102

Taxable profits

SMEs

FRSSE

Transition to FRS 102

Chapter 3

The Scheme of the Legislation

Direct taxes

Scope and administration

Structure of the legislation

Key statutory provisions

Foreign currency rules

Distributable profits

History of the loan relationships and derivative contracts legislation

BEPS Project

Non-corporates

Chapter 4

Loan Relationships: Scope and Definition

Scope of application

Three categories of loan relationship

Type 1: Actual loan relationships

Intra-group balances

Finance leases

Hybrids

Guarantees

Summary - actual loans

Type 2: Deemed loan relationships

Conversion of money debt into loan relationship

Type 3: Relevant non-lending relationships

Economic equivalence

Trading/non-trading

Chapter 5

Loan Relationships: General Computational Provisions.

Overview

Debits and credits

Accountings periods beginning on or after 1 January 2016

Commercial accounts and statutory overrides

Derecognition

Loan relationships in wrappers

Debt releases

Amortised cost basis

Fair value accounting

Difference between amortised cost and fair value

Non-compliant accounts

Change of accounting basis

Non-commercial loans

Summary of computational provisions

Chapter 6

Loan Relationships: Special Computational Provisions

Tests of connection

Debt restructurings

Corporate rescue/substantial modification exemptions

Deemed releases

Late or unpaid interest

Close companies" deeply discounted securities

Non-arm"s length transactions

Capitalisation of finance costs

The group continuity rules

Intra-group financing arrangements

Mezzanine financing

Disguised interest

Unallowable purposes

Regime anti-avoidance rules

Chapter 7

Impairment Losses

Impairment

Trading losses

Non-trading deficits

Pre-trading loans

Set-off against profits of the deficit period

Carry-back claims

Carry-forward relief

Special rules for banks

Link companies and group/consortium companies

Consortium conditions

Consortium and impairment relief

Imported losses

Chapter 8

Securities

Meaning of security

Dematerialised securities

Debts on a security

Regulatory capital

Securitisation

Private finance initiative

Structured finance arrangements

Qualifying corporate bonds

Non-QCBs

Conversion/exchange of non-QCBs for QCBs

Deeply discounted securities

Excluded indexed securities

Quoted Eurobonds

Eurocommercial paper

Warrants

Capital contributions

Gilts

Stripped securities

Stamp duty and SDRT

Chapter 9.

Interest

Interest

Discounts

Interest recharacterised as dividends

Withholding tax on interest

Location of source

Double taxation agreements

Grossing-up clauses

Banking privilege

Interest payments by companies

Public revenue dividends

Funding bonds

Accrued income scheme

Quoted Eurobond exemption

The EU Savings Directive

Private placements/Peer-to-peer lending

Deductibility of corporate interest expense

Chapter 10

Foreign Exchange Gains and Losses

Accruals basis

Realisations basis

Tax treatment of exchange gains - non-corporates

Accounting rules

Functional v presentation currency

Designated currency

Permanent establishments

Tax rules

Controlled foreign companies

Partnerships including companies

Translation

Chapter 11

Reorganisations, Acquisitions and Disposals

Reorganisations

Debt-equity swaps

Company law position

Debt-equity swaps - tax treatment

HMRC"s view

Shares replaced by QCBs (loan relationship)

Tax treatment of creditors who are individuals

Loan note alternatives

Section 136 and 139 reconstructions

Clearance procedure

Intra-group transactions

Earn-outs

Novation

Chapter 12

Special Companies

Investment companies

Approved investment trusts

Venture capital trusts

Venture capital limited partnerships

Authorised unit trusts/OEICs

Offshore funds

Insurance companies

Corporate partnerships

Industrial and provident societies

Chapter 13

Derivative Contracts - Definition and Scope

Definition of "derivative contract

The accounting conditions

Contracts which do not satisfy the accounting conditions

Embedded derivatives

Excluded contracts.

Basis of taxation

Intra-group transfers

Anti-avoidance provisions

Chapter 14

Derivative Contracts - Measurement of Profits

Margining

Master agreements

Interest rate agreements

Valuation of swaps

Breakage payments

Currency contracts and options

Cross currency swaps

Currency options

Credit derivatives

Credit risk

Example - acquisition of shares in foreign currency

Chapter 15

Embedded Derivatives

Outline

Hybrid contracts

Accounting treatment

Convertibles

Tax treatment - individual investors

Tax treatment - companies

Convertible, exchangeable and asset linked debt

Capital gains tax treatment in relation to derivative contracts

Derivatives embedded in contracts other than loan relationships

Chapter 16

Hedging and Deferral

Purpose of hedging

History of the legislation

Hedge accounting

The three types of hedge

The hedged item

Hedging instruments

Summary of accounting treatment

Hedging breaks

Tax problems arising from IFRS

Tax rules - general

The Disregard Regulations

Types of hedging arrangement addressed by the Disregard Regulations

Permanent equity

Derivative contracts

Bringing deferred amounts back into charge

Order of set off

Assets subject to capital gains reorganisation provisions

One-way exchange effect

Over-hedging ("risk transfer schemes")

Group mismatch schemes

Chapter 17

Case Law

Bank of Scotland v Dunedin Property Investment Co

Citibank Investments Ltd v Griffin

HSBC Life (UK) Ltd v Stubbs

IRC v Scottish Provident

HBOS Treasury Services plc v R &amp

C Comrs

Klincke v R &amp

Abbey National Treasury Services plc v R &amp

Pike v R &amp

Biffa (Jersey) Ltd v R &amp

Bristol &amp

West plc v R &amp.

C Comrs

Stagecoach Group plc v R &amp

Trigg v R &amp

Greene King plc v R &amp

Union Castle Mail Steamship Company Ltd v R &amp

Chapter 18

Islamic Finance

Islamic financing arrangements

UK tax treatment

Chapter 19

Stock Lending and Repos

Stock lending - legal and accounting

Tax treatment of stock lending

Repos - outline

Gilt repos

Repos - accounting treatment

Repos - the legislation

Repos - tax treatment

Manufactured payments

Anti-avoidance rules

Stamp duty

Euroconversion

Chapter 20

International Aspects

BEPS

Non-resident companies

Interaction of foreign tax credits and loan relationships rules

Arbitrage rules

Attribution of profits to permanent establishments

EU Mergers Directive

Hybrid mismatches

Chapter 21

Worldwide Debt Cap

Future of the legislation

Purpose of the legislation

Scheme of the legislation

The worldwide group

Key definitions

The gateway test

Financial services group

Group treasury companies

Other exclusions

The disallowance

Tested expense amount

Available amount

Exemptions

Giving effect to the disallowance

Financing income exemption

Intra-group financing income

Controlled foreign company

Administration

The legislation in practice

Appendix

Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004, SI 2004/3256

Index.

Notes:

Includes index.

Includes bibliographical references and index.

Description based on print version record.

Description based on publisher supplied metadata and other sources.

ISBN:

9781784511357

1784511358

9781784511364

1784511366

OCLC:

1262373926