(1)A relevant contract is not a derivative contract for the purposes of this Part if its underlying subject matter—
(a)consists wholly of excluded property (see subsections (2) to (5)), or
(b)is treated as consisting wholly of such property.
(2)“Excluded property” means—
(a)intangible fixed assets,
(b)shares in a company other than shares within subsection (3), or
(c)rights of a unit holder under a unit trust scheme other than a scheme in relation to which section 490 (holdings in OEICs, unit trusts and offshore funds treated as creditor relationship rights) has effect.
(3)The shares within this subsection are—
(a)shares to which section 524 or 526 (shares subject to outstanding third party obligations and shares which are non-qualifying shares) applies, and
(b)shares in an open-ended investment company in relation to which section 490 has effect.
(4)Subsection (2)(a) applies only in relation to a relevant contract which is an option or future.
(5)Subsection (2)(b) and (c) apply only in relation to a relevant contract which—
(a)meets any of conditions A to E in section 591, and
(b)is not designed to produce a return which equates in substance to the return on an investment of money at a commercial rate of interest.
(6)Section 590 applies for determining whether the underlying subject matter of a relevant contract is to be treated as consisting wholly of excluded property.