Income and Corporation Taxes Act 1988

399 Dealings in commodity futures etc: withdrawal of loss relief. U.K.

(1) M1 If, apart from section [F1 143(1) of the 1992 Act] or section 128 above, gains arising to any person in the course of dealing in commodity or financial futures or in qualifying options would constitute, for the purposes of the Tax Acts, profits or gains chargeable to tax under Schedule D otherwise than as the profits of a trade, then any loss arising in the course of that dealing shall not be allowable against profits or gains which are chargeable to tax under Schedule D.

[F2 (1A) Subsection (1) above does not apply to a loss arising from a transaction to which Schedule 5AA applies.]

(2) M2 Relief shall not be given to any person under section 380, 381 or [F3 393A(1)] in respect of a loss sustained in a trade of dealing in commodity futures if—

(a) the loss was sustained in a trade carried on in partnership and that person or one or more of the other partners was a company; and

(b) a scheme has been effected or arrangements have been made (whether by the partnership agreement or otherwise) such that the sole or main benefit that might be expected to accrue to that person from his interest in the partnership was the obtaining of a reduction in tax liability by means of any such relief.

(3) Where relief has been given in a case to which subsection (2) above applies it shall be withdrawn by the making of an assessment under Case VI of Schedule D.

(4) Subsection (2) above does not apply where the scheme was effected or the arrangements were made wholly before 6th April 1976.

(5) M3 In this section “commodity futures”, “financial futures” and “qualifying options” have the same meanings as in section [F4 143 of the 1992 Act], and the reference in subsection (1) to a loss arising in the course of dealing in commodity or financial futures includes any loss which is regarded as arising in the course of such dealing by virtue of subsection [F4 143(3)] of that section.

Textual Amendments

F1 Words in s. 399(1) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 14(19)(a) (with ss. 60, 101(1), 171, 201(3)).

F2 S. 399(1A) inserted (with effect in accordance with s. 80(6)(7) of the amending Act) by Finance Act 1997 (c. 16), s. 80(4)

F3 Words in s. 399(2) substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 73(3)-(5), Sch. 15 para. 11

F4 Words in s. 399(5) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 14(19)(b) (with ss. 60, 101(1), 171, 201(3)).

Marginal Citations

M1 Source—1985 s.72(1); 1987 (No.2) s.81(1)

M2 Source—1978 s.31

M3 Source—1985 s.72(2); 1987 Sch.15 11(2); 1987 (No.2) s.81(1)