(1)M1If, apart from section [F1143(1) of the 1992 Act] or [F2section 128(1) above], gains arising to any person in the course of dealing in commodity or financial futures or in qualifying options would constitute, [F3for the purposes of the Income 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.
[F4(1A)Subsection (1) above does not apply to a loss arising from a transaction to which Schedule 5AA applies.]
[F5(1B)If, apart from section 143(1) of the 1992 Act or section 128(2) above, gains arising in the course of dealing in financial futures or in qualifying options would constitute, for the purposes of the Corporation Tax Acts, profits and gains chargeable to tax under Case V or VI of Schedule D, then any loss arising in the course of that dealing shall not be allowable against profits and gains which are chargeable to tax under Case V or VI of Schedule D.]
(2)M2Relief shall not be given to any person under section 380, 381 or [F6393A(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(3)Where relief has been given in a case to which subsection (2) above applies it shall be withdrawn by the making of an assessment under Case VI of Schedule D.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)M3In this section “commodity futures”, “financial futures” and “qualifying options” have the same meanings as in section [F7143 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 [F7143(3)] of that section.
Textual Amendments
F1Words 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)).
F2Words in s. 399(1) substituted (with effect in accordance with s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), Sch. 27 para. 4(1)(a) (with Sch. 28)
F3Words in s. 399(1) substituted (with effect in accordance with s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), Sch. 27 para. 4(1)(b) (with Sch. 28)
F4S. 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)
F5S. 399(1B) inserted (with effect in accordance with s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), Sch. 27 para. 4(2) (with Sch. 28)
F6Words in s. 399(2) substituted by Finance Act 1991 (c. 31, SIF 63:1), s. 73(3)-(5), Sch. 15 para. 11
F7Words 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
M1Source—1985 s.72(1); 1987 (No.2) s.81(1)
M2Source—1978 s.31
M3Source—1985 s.72(2); 1987 Sch.15 11(2); 1987 (No.2) s.81(1)