Corporation Tax Act 2009 (c. 4)

Part 7 U.K. Derivative contracts

Modifications etc. (not altering text)

C1 Pt. 7 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)

Chapter 5 U.K. Continuity of treatment on transfers within groups

Transferee leaving group after replacing transferor as party to derivative contract U.K.

631 Transferee leaving group otherwise than because of exempt distribution U.K.

(1) This section applies if—

(a) the transferee ceases to be a member of the relevant group, and

(b) it does not so cease just because of a distribution which is exempt [F1 as a result of section 1075 of CTA 2010 (exempt distributions)].

(2) If condition A or B is met, this Part applies as if—

(a) the transferee had assigned its rights and liabilities under the relevant derivative contract immediately before so ceasing,

(b) the assignment had been for consideration of an amount equal to their fair value at that time, and

(c) the transferee had immediately reacquired them for consideration of the same amount.

(3) Condition A is that if subsection (2) applied a credit would be brought into account in accordance with this Part by the transferee because of subsection (2)(a) and (b).

(4) Condition B is that—

(a) the transferee has a hedging relationship between the relevant derivative contract and a creditor relationship, and

(b) because of section 345(2)(a) and (b) (transferee leaving group otherwise than because of exempt distribution) a credit is to be brought into account by the transferee for the purposes of Part 5 (loan relationships) in respect of the creditor relationship.

Textual Amendments

F1 Words in s. 631(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 640 (with Sch. 2)

Modifications etc. (not altering text)

C2 S. 631 excluded (with effect in accordance with reg. 1(2) of the amending S.I.) by Mutual Societies (Transfers of Business) (Tax) Regulations 2009 (S.I. 2009/2971), regs. 1(1), 25(3)(c) (with reg. 25(6))

C3 S. 631 applied (with effect in accordance with reg. 1(2) of the amending S.I.) by Mutual Societies (Transfers of Business) (Tax) Regulations 2009 (S.I. 2009/2971), regs. 1(1), 25(5)(b) (with reg. 25(6))