Contracts relating to holdings in unit trust schemes, open-ended investment companies and offshore fundsU.K.
36(1)This paragraph applies in relation to a relevant contract to which a company is party in an accounting period if—
(a)it is not a derivative contract for the purposes of this Schedule, and
(b)its underlying subject matter consists wholly or partly of a holding which is, in that period, a relevant holding.
[F1(2)The Corporation Tax Acts have effect for that period (and any succeeding period in which the relevant contract is a relevant contract of the company) as if the relevant contract were a derivative contract.
(2A)The debits and credits to be brought into account for the purposes of this Schedule as respects the company’s relevant holdings must be determined on the basis of fair value accounting.]
(3)For the purposes of this paragraph a person holds a relevant holding in an accounting period if, at any time in that period, he holds—
(a)any rights under a unit trust scheme,
(b)any shares in an open-ended investment company, or
(c)any relevant interests in an offshore fund,
and there is a time in that period when that scheme, company or fund fails to satisfy the non-qualifying investments test.
(4)For the purposes of this paragraph—
(a)“a relevant interest in an offshore fund” has the same meaning as in paragraph 7 of Schedule 10 to the Finance Act 1996 (c. 8), and
(b)a unit trust scheme, open-ended investment company or offshore fund fails to satisfy the non-qualifying investments test if it fails to satisfy the test in paragraph 8 of that Schedule.
Textual Amendments
F1Sch. 26 para. 36(2)(2A) substituted for Sch. 26 para. 36(2) (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 62