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Finance Act 2002

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This is the original version (as it was originally enacted).

Contracts becoming held for purposes of trade

45(1)This paragraph applies where a relevant contract of a company—

(a)whose underlying subject matter consists, or is treated as consisting, wholly of—

(i)shares in a company,

(ii)rights of a unit holder under a unit trust scheme, or

(iii)assets representing a loan relationship to which either section 92 or 93 of the Finance Act 1996 (c. 8) applies,

(b)which is a chargeable asset, and

(c)which was entered into or acquired by the company otherwise than for the purposes of a trade carried on by it,

is at any time appropriated by the company for the purposes of a trade carried on by it.

(2)Where this paragraph applies—

(a)section 161 of the Taxation of Chargeable Gains Act 1992 (c. 12) (appropriations to and from stock) shall have effect in relation to the appropriation of that contract, but

(b)the company may not make an election under subsection (3) of that section in relation to that appropriation.

(3)For the purposes of this paragraph an asset is a chargeable asset if any gain accruing on the disposal of the asset by the company would be a chargeable gain for the purposes of the Taxation of Chargeable Gains Act 1992 (and includes any obligations under futures contracts which, by virtue of section 143 of that Act, are regarded as assets to the disposal of which that Act applies).

(4)Paragraph 9 applies for the purpose of determining whether the underlying subject matter of a relevant contract is to be treated as consisting wholly of the property referred to in sub-paragraph (1)(a).

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