(1)This section applies if a company is a party to a relevant contract which ceases to be a derivative contract.
(2)The company is treated for the purposes of this Part as if it had disposed of the contract in a related transaction at the relevant time for consideration of an amount equal to the notional carrying value of the contract at that time.
(3)In this section “the relevant time” means the time when the contract ceases to be a derivative contract.
(4)For the purposes of this section, the “notional carrying value” of the contract at the relevant time is the amount which would have been the carrying value of the contract in the accounts of the company if a period of account had ended immediately before that time.
(5)See also section 662 (chargeable gains provision for contracts ceasing to be derivative contracts).
(1)This section applies to a derivative contract of a company for an accounting period if each of conditions A to D 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 creditor relationship of the company.
(3)Condition B is that the derivative contract is treated as a contract for differences by section 585(3) (contract treated as option, future or contract for differences).
(4)Condition C is that the creditor relationship is an index-linked gilt-edged security.
(5)Condition D is that the credits and debits which fall to be brought into account for the accounting period for the purposes of Part 5 (loan relationships) in respect of the host contract are non-trading credits and non-trading debits.
(6)The credits and debits which would fall to be brought into account in accordance with this Part in respect of the derivative contract for the accounting period apart from this section may not be so brought into account.
(7)In this section—
“the host contract” means the loan relationship to which the company is treated as a party under section 415(2) (loan relationships with embedded derivatives) because of the creditor relationship mentioned in subsection (2), and
“index-linked gilt-edged security” has the same meaning as in Part 5 (see section 399(4)).