Part 3Trading income
Chapter 9Trade profits: other specific trades
Dealers in securities etc
128Taxation of amounts taken to reserves
1
This section applies for the purpose of calculating the profits of a company's trade if—
a
the company carries on a banking business, an insurance business or a business consisting wholly or partly of dealing in securities, and
b
a profit on the sale of securities held by the company would be brought into account in calculating the trading profits of that business.
2
Profits and losses from the securities that in accordance with generally accepted accounting practice are—
a
calculated by reference to the fair value of the securities, and
b
recognised in the company's statement of recognised gains and losses or statement of changes in equity,
are brought into account in calculating the profits of the trade.
3
But subsection (2) does not apply—
a
to an amount so far as deriving from or otherwise relating to an amount brought into account under that subsection in an earlier period of account, or
b
to an amount recognised for accounting purposes by way of correction of a fundamental error.
4
In this section “securities” includes—
a
shares,
b
rights of unit holders in unit trust schemes to which TCGA 1992 applies as a result of section 99 of TCGA 1992, and
c
in the case of a company with no share capital, interests in the company possessed by members of the company,
but does not include a loan relationship (within the meaning of Part 5).