SCHEDULES

SCHEDULE 26Derivative contracts

Part 2Derivative contracts

5Qualified exclusion: contract held by company for purposes of trade

1

Paragraph 4 does not prevent a relevant contract to which this paragraph applies from being a derivative contract.

2

This paragraph applies to a relevant contract of a company if—

a

it is entered into or acquired by the company for the purposes of a trade carried on by it, and

b

its underlying subject matter consists, or is treated as consisting, wholly of—

i

shares in a company,

ii

rights of a unit holder under a unit trust scheme, or

iii

assets representing a loan relationship to which either section 92 or 93 of the Finance Act 1996 applies.

3

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 (2)(b).