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Corporation Tax Act 2009
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Corporation Tax Act 2009, Section 645 is up to date with all changes known to be in force on or before 16 December 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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- s. 1058B(5)(ea) inserted by 2023 c. 20 Sch. para. 57
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- s. 1058B(5)(ea) inserted by 2023 c. 20 Sch. para. 57
645Creditor relationships: embedded derivatives which are optionsU.K.
This section has no associated Explanatory Notes
(1)This section applies to a derivative contract of a company for an accounting period if each of conditions A to E is met.
(2)Condition A is that the derivative contract is a relevant contract to which the company is treated as a party under section 585(2) (loan relationships with embedded derivatives) because of a creditor relationship of the company.
(3)Condition B is that the derivative contract is treated as an option by section 585(3) (contract treated as option, future or contract for differences).
(4)Condition C is that the underlying subject matter of the derivative contract—
(a)is qualifying ordinary shares, or
(b)is mandatorily convertible preference shares.
(5)Condition D is that the company is not a party to the creditor relationship at any time in the accounting period for the purposes of a trade carried on by it.
(6)Condition E is that the company is not an excluded body.
(7)Where this section applies to a derivative contract, the asset representing the creditor relationship is treated for corporation tax purposes as not being a qualifying corporate bond.
(8)See also—
(a)section 647 (meaning of certain expressions in this section), and
(b)section 670 (treatment of net gains and losses on exercise of option).
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