[F3Treatment of credits and debits on terminal exercise of non-embedded option or running to delivery of future]U.K.
[F1[F2[F345HA.(1)This paragraph applies where—
(a)a company is party to a derivative contract in an accounting period,
(b)the derivative contract is a plain vanilla contract which is an option,
(c)rights comprised in the plain vanilla contract are exercised to any extent in that accounting period, and
(d)those rights are rights to acquire shares.
(1A)This paragraph also applies where—
(a)a company is party to a derivative contract in an accounting period,
(b)the derivative contract is a plain vanilla contract which is a future,
(c)delivery is taken of an asset in accordance with the terms of the future, and
(d)that asset is shares.]
(2)[F4Where this paragraph applies], for the purpose of computing any chargeable gain accruing to the company on a disposal by it of all the shares [F5acquired or delivered], the sums allowable as a deduction under section 38(1)(a) of [F6TCGA 1992] (acquisition costs) shall—
(a)if G exceeds L, be increased by the amount of that excess,
(b)if L exceeds G, be reduced by the amount of that excess,
and, in the case of a part disposal of those shares, section 42(2) of that Act shall have effect accordingly.
(3)If the amount of the excess in sub-paragraph (2)(b) is greater than the amount of expenditure allowable under section 38(1)(a) of [F7TCGA 1992], the amount of the excess that cannot be deducted from the expenditure so allowable shall, for the purpose mentioned in sub-paragraph (2), be added to the amount of the consideration for the disposal of the shares.
(4)In this paragraph—
G is the sum of the credits brought into account under [F8paragraph 14(3)] in respect of the derivative contract in each relevant accounting period so far as referable, on a just and reasonable apportionment, to the shares acquired as a result of the exercise of the rights mentioned in [F9sub-paragraph (1)(c) or the delivery mentioned in sub-paragraph (1A)(c)];
L is the sum of the debits brought into account under [F8paragraph 14(3)] in respect of the derivative contract in each relevant accounting period, so far as so referable.
(5)For the purposes of sub-paragraph (4), a “relevant accounting period” is—
(a)the accounting period in which the disposal in question is made, or
(b)any previous accounting period.]]
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 paras. 45H, 45HA inserted (with effect in accordance with art. 1(3) of the amending S.I.) by The Finance Act 2002, Schedule 26, Parts 2 and 9 (Amendment No. 2) Order 2005 (S.I. 2005/2082), arts. 1(2), 17
F3Words in Sch. 26 para. 45HA 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, 19(2)
F4Words in Sch. 26 para. 45HA(2) 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, 19(3)(a)
F5Words in Sch. 26 para. 45HA(2) 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, 19(3)(b)
F6Words in Sch. 26 para. 45HA(2) 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, 30
F7Words in Sch. 26 para. 45HA(3) 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, 30
F8Words in Sch. 26 para. 45HA(4) substituted (with effect in accordance with art. 1 of the amending S.I.) by The Finance Act 2002, Schedule 26 (Parts 2 and 9) (Amendment No. 3) Order 2005 (S.I. 2005/3440), arts. 1, 10
F9Words in Sch. 26 para. 45HA(4) 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, 19(4)