C1Part 7Derivative contracts
Chapter 3Credits and debits to be brought into account: general
F1Exchange gains and losses
Pt. 7 Ch. 3 crossheading substituted (with effect in accordance with Sch. 21 para. 11 of the commencing Act) by Finance Act 2009 (c. 10), Sch. 21 para. 5
606EF2Counterfactual currency movement assumptions: treatment of options
1
This section applies in relation to the calculation for the purposes of section 606A(5) of exchange gains and losses of a company arising in an accounting period of that company where—
a
the calculation is made on the assumption specified in subsection (2) or (3) of section 606D (“the relevant assumption”), and
b
an option is part of the arrangements.
2
Subsection (3) applies if the option is exercised on the test day.
3
The option is to be treated as not having been exercised on the test day if, on the relevant assumption, it is in all the circumstances more likely than not that it would not have been exercised on that day.
4
Subsection (5) applies if the option is not exercised on the test day but was exercisable on that day.
5
The option is to be treated as having been exercised on the test day if, on the relevant assumption, it is in all the circumstances more likely than not that it would have been exercised on that day.
Pt. 7 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)