SCHEDULES

C1C9C3C2C5C4C6C7C8SCHEDULE 26Derivative contracts

Annotations:
Modifications etc. (not altering text)
C1

Sch. 26 modified by 1996 c. 8, s. 86(3C) (as inserted (24.7.2002 with effect as mentioned in s. 82(2) of the amending Act) by 2002 c. 23, s. 82, Sch. 25 Pt. 1 para. 6(3))

C9

Sch. 26 extended (retrospective to 30.9.2002) by Finance Act 2003 (c. 14), s. 177(4)(8)(11)

C3

Sch. 26 applied by 1988 c. 1, s. 440(2B) (as amended (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 70)

C2

Sch. 26 modified by 1996 c. 8, s. 94A (as inserted (with effect in accordance with s. 52(3) of the amending Act) by Finance Act 2004 (c. 12), Sch. 10 para. 13)

C5

Sch. 26 applied (with modifications) (5.10.2004) by Energy Act 2004 (c. 20), s. 198(2), Sch. 9 para. 24 (with s. 38(2)); S.I. 2004/2575, art. 2(1), Sch. 1

C4

Sch. 26 applied (with modifications) (5.10.2004) by Energy Act 2004 (c. 20), s. 198(2), Sch. 9 para. 12 (with s. 38(2)); S.I. 2004/2575, art. 2(1), Sch. 1

C8

Sch. 26 modified (19.7.2006) by Finance Act 2006 (c. 25), s. 136(2)(e)

Part 2Derivative contracts

4DF1Treatment of credits and debits on former chargeable asset

1

This paragraph applies if—

a

a company is party to a plain vanilla contract which (not having been a derivative contract) became a derivative contract before 30th December 2006,

b

the company disposes of the derivative contract by ceasing to be a party to it, and

c

paragraphs 4A and 4B do not apply in relation to the contract.

2

For the purposes of computing any chargeable gain accruing to the company on the disposal—

a

paragraph 1(2) does not apply; and

b

the sums allowable as a deduction under section 38(1)(a) of TCGA 1992 (acquisition costs) shall—

i

if G exceeds L, be increased by the amount of that excess, and

ii

if L exceeds G, be reduced by the amount of that excess.

3

If the amount of the excess in sub-paragraph (2)(b)(ii) is greater than the amount of expenditure allowable under section 38(1)(a) of TCGA 1992, the amount of the excess that cannot be deducted from the expenditure shall, for the purpose mentioned in sub-paragraph (2), be added to the amount of the consideration for the disposal.

4

In this paragraph—

  • G is the sum of the credits brought into account under paragraph 14(3) in respect of the derivative contract in each relevant accounting period, and

  • L is the sum of the debits brought into account under paragraph 14(3) in respect of the derivative contract in each relevant accounting period.

5

For the purposes of sub-paragraph (4) a “relevant accounting period” is—

a

the accounting period in which the disposal is made, or

b

any previous accounting period.