Modifications etc. (not altering text)
C1Pt. 7 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)
C2Pt. 7 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)
C3Pt. 7 modified by 2007 c. 3, s. 809FZZ(8) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))
(1)Section 658 (chargeable gain or allowable loss treated as accruing) applies to a derivative contract of a company for an accounting period if each of conditions A to F is met.
(2)Condition A is that the derivative contract is a relevant contract to which the company is treated as a party under section 585(2) (loan relationships with embedded derivatives) because of a debtor relationship of the company.
(3)Condition B is that the derivative contract—
(a)is treated as a contract for differences by section 585(3) (contract treated as option, future or contract for differences), and
(b)is not within section 652.
(4)Condition C is that the derivative contract is an exactly tracking contract.
(5)Condition D is that the underlying subject matter of the derivative contract is shares.
(6)Condition E is that at the time when the company became a party to the debtor relationship—
(a)it was not carrying on a banking business or a business as a securities house, or
(b)if it was carrying on such a business, it did not become a party to the debtor relationship in the ordinary course of that business.
(7)Condition F is that the company is not an excluded body.
(8)For the meaning of “exactly tracking contract”, see section 657.