PART XII SPECIAL CLASSES OF COMPANIES AND BUSINESSES
CHAPTER III UNIT TRUST SCHEMES, DEALERS IN SECURITIES ETC.
F2 Dealers in securities, banks and insurance businesses
F1472ATrading profits etc. from securities: taxation of amounts taken to reserves
1
This section applies in relation to securities—
a
which are held by a person carrying on a banking business, an insurance business or a business consisting wholly or partly in dealing in securities; and
b
which are such that a profit on their sale would form part of the trading profits of that business.
2
Profits and losses arising from such securities that in accordance with generally accepted accounting practice are—
a
calculated by reference to the fair value of the securities, and
b
recognised in that person’s statement of recognised gains and losses or statement of changes in equity,
shall be brought into account in computing the profits or losses of a business in accordance with the provisions of this Act applicable to Case I of Schedule D.
3
Subsection (2) does not apply—
a
to an amount to the extent that it derives from or otherwise relates to an amount brought into account under that subsection in an earlier period of account, or
b
to an amount recognised for accounting purposes by way of correction of a fundamental error.
4
In this section, “securities”—
a
includes shares and any rights, interests or options that by virtue of section 99, 135(5) or 136(5) of the Taxation of Chargeable Gains Act 1992 are treated as shares for the purposes of sections 126 to 136 of that Act; but
b
does not include a loan relationship (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996).
Ss. 468H-468R and cross-headings inserted (with effect in accordance with Sch. 14 para. 7 of the amending Act) by Finance Act 1994 (c. 9), Sch. 14 para. 2