Contracts becoming held for purposes of tradeU.K.
45(1)This paragraph applies where a relevant contract of a company—
(a)whose underlying subject matter consists, or is treated as consisting, wholly of—
(i)shares in a company [F1or],
(ii)rights of a unit holder under a unit trust scheme, F2...
F3(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)which is a chargeable asset, and
(c)which was entered into or acquired by the company otherwise than for the purposes of a trade carried on by it,
is at any time appropriated by the company for the purposes of a trade carried on by it.
(2)Where this paragraph applies—
(a)section 161 of the Taxation of Chargeable Gains Act 1992 (c. 12) (appropriations to and from stock) shall have effect in relation to the appropriation of that contract, but
(b)the company may not make an election under subsection (3) of that section in relation to that appropriation.
(3)For the purposes of this paragraph an asset is a chargeable asset if any gain accruing on the disposal of the asset by the company would be a chargeable gain for the purposes of the Taxation of Chargeable Gains Act 1992 (and includes any obligations under futures contracts which, by virtue of section 143 of that Act, are regarded as assets to the disposal of which that Act applies).
(4)Paragraph 9 applies for the purpose of determining whether the underlying subject matter of a relevant contract is to be treated as consisting wholly of the property referred to in sub-paragraph (1)(a).
Textual Amendments
F1Word in Sch. 26 para. 45(1)(a)(i) inserted (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 2005 (S.I. 2005/646), arts. 1(1), 14(2)
F2Word in Sch. 26 para. 45(1)(a)(ii) 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 2005 (S.I. 2005/646), arts. 1(1), 14(3)
F3Sch. 26 para. 45(1)(a)(iii) 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 2005 (S.I. 2005/646), arts. 1(1), 14(4)