Forex Fl and loan relationship reform

The Inland Revenue issued a consultative document on the forex FI and loan relationship regimes on 8 November and comments are invited on the proposals set out in the document by 12 January 2001. In this article John Lindsay considers the key areas that are addressed in the consultative document and the main points on which comments are invited.

John Lindsay Linklaters & Alliance

The publication of the consultative document was originally announced in the press releases that accompanied Budget 2000. The author understands that the reason why it has taken some eight months to produce the document is not due to inaction on part of the Inland Revenue but, rather, the need to consult with ministers before issuing the document. The proposals discussed in the document include specific amendments to the forex, financial instruments (FI) and loan relationship regime as well as more radical proposals of consolidating forex into the FI and loan relationship regimes or of consolidating all three regimes into one. Initial indications are that the Inland Revenue would like to deal with the specific amendments in the Finance Bill 2001.