Income Tax (Trading and Other Income) Act 2005

562 When disposals of futures and options occur: general U.K.

(1) Any question whether there is a disposal for the purposes of this Chapter, or as to when such a disposal is made, is to be determined—

(a) in accordance with sections 143(5) and (6), 144 and 144A of TCGA 1992 (closing out and settlement of futures contracts and rules in relation to options),

(b) otherwise in accordance with the provisions having effect for determining for the purposes of TCGA 1992 whether or when an asset has been disposed of, and

(c) on assumptions A to C.

(2) Assumption A is that all futures are assets for the purposes of TCGA 1992.

(3) Assumption B is that the words “in the course of dealing in commodity or financial futures” are omitted from section 143(5) and (6) of TCGA 1992 in each place where they occur.

(4) Assumption C is that any reference in TCGA 1992 to a financial option within the meaning given by section 144(8) of that Act is a reference to any option that at the time of the disposal in question is not listed on a recognised stock exchange or recognised futures exchange (regardless of whether the conditions in section 144(8)(c)(i) to (iv) of that Act are met).

(5) Subsection (1) is subject to section 563 (timing of certain grants of options where related disposals occur later), and see also section 564 (deemed disposal where futures run to delivery or options are exercised).