HMRC have published a discussion paper together with draft regulations on proposed amendments to the corporation tax rules on loan relationships and derivatives as a result of the introduction of accounting standard IFRS 9.

The discussion paper invites comments on amendments to Parts 5 and 7 of the Corporation Tax Act 2009 and the proposals relate to changes in accounting standards on financial instruments arising from the introduction of International Financial Reporting Standard 9.

The newly issued proposed regulations address the impact of changes in the classification and measurement of financial instruments, and in particular make changes in the following areas:

• the definition and application of a ‘change of accounting policy’;
• the adjustments to be made on a change of accounting policy;
• the rules on hybrid and compound instruments;
• transitional adjustments under the Change of Accounting Practice Regulations; and
• other consequential changes.

Full details of the proposed changes and draft regulations can be found at http://www.hmrc.gov.uk/drafts/ias39-wg-discpaper3.pdf