Corporation Tax Act 2009 (c. 4)

Part 7 U.K. Derivative contracts

Modifications etc. (not altering text)

C1 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)

C2 Pt. 7 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)

Chapter 7 U.K. Chargeable gains arising in relation to derivative contracts

Issuers of securities with embedded derivatives: deemed options U.K.

653 Shares issued or transferred as a result of exercise of deemed option U.K.

(1) Subsections (2) and (3) apply if—

(a) the option mentioned in section 652(3) is exercised at any time in the accounting period, and

(b) shares are issued or transferred in fulfilment of the obligations under the option (“the relevant disposal”).

(2) Section 144(2) of TCGA 1992 (exercise of options) applies to the relevant disposal as if the carrying value of the option at the time the company became a party to the debtor relationship mentioned in section 652(2) were the consideration for the grant of the option.

(3) So far as it would otherwise apply, section 17(1) of TCGA 1992 (deemed market value consideration) does not apply to the relevant disposal.