Index-linked gilt-edged securities with embedded contracts for differencesU.K.
[F145I.(1)This paragraph applies to a derivative contract of a company for an accounting period if the following conditions are satisfied—
[F2(a)the derivative contract is a loan-contract embedded derivative to which the company is treated as party by virtue of a creditor relationship of the company,]
(b)that creditor relationship is an index-linked gilt-edged security,
(c)the credits and debits which fall to be brought into account for the accounting period for the purposes of Chapter 2 of Part 4 of the Finance Act 1996 in respect of the [F3loan-contract host contract] are non-trading credits and non-trading debits,
F4(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(e)[F5the derivative contract is treated by virtue of section 94A(3) of the Finance Act 1996] as a contract for differences.
(2)The credits and debits that would, apart from this paragraph, fall to be brought into account under this Schedule in respect of the derivative contract for the accounting period shall not be so brought into account.
(3)In this paragraph—
F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“gilt-edged security” has the meaning given by section 103(1) of the Finance Act 1996;
“index-linked gilt-edged security” means any gilt-edged security the amount of the payments under which is determined wholly or partly by reference to the retail prices index;
“the retail prices index” has the same meaning as in the Income Tax Acts ([F7section 989 of ITA 2007]).]
Textual Amendments
F1Sch. 26 paras. 45A-45I inserted (with effect in accordance with art. 1(2)(3)(4) of the amending S.I.) by The Finance Act 2002, Schedule 26, Parts 2 and 9 (Amendment) Order 2004 (S.I. 2004/2201), arts. 1(1), 15
F2Sch. 26 para. 45I(1)(a) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2002, Schedule 26, (Parts 2 and 9) (Amendment) Order 2006 (S.I. 2006/3269), arts. 1, 20(2)
F3Words in Sch. 26 para. 45I(1)(c) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2002, Schedule 26, (Parts 2 and 9) (Amendment) Order 2006 (S.I. 2006/3269), arts. 1, 20(3)
F4Sch. 26 para. 45I(1)(d) omitted (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Finance Act 2002, Schedule 26, (Parts 2 and 9) (Amendment) Order 2006 (S.I. 2006/3269), arts. 1, 20(4)
F5Words in Sch. 26 para. 45I(1)(e) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2002, Schedule 26, (Parts 2 and 9) (Amendment) Order 2006 (S.I. 2006/3269), arts. 1, 20(5)
F6Words in Sch. 26 para. 45I(3) omitted (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Finance Act 2002, Schedule 26, (Parts 2 and 9) (Amendment) Order 2006 (S.I. 2006/3269), arts. 1, 20(6)
F7Words in Sch. 26 para. 45I(3) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 422(4) (with Sch. 2)