Part 7Derivative contracts
Chapter 8Further provision about chargeable gains and derivative contracts
Company ceasing to be party to certain contracts
660Contract relating to holding in OEIC, unit trust or offshore fund
(1)
This section applies if—
(a)
a company is a party to a relevant contract in two successive accounting periods,
(b)
section 587 (contract relating to holding in OEIC, unit trust or offshore fund) applies in relation to the relevant contract for the second of those periods but not the first, and
(c)
immediately before the beginning of the second period the relevant contract was a chargeable asset.
(2)
The company must bring into account for the accounting period in which it ceases to be a party to the contract the amount of any chargeable gain or allowable loss which would have been treated as accruing to it on the assumptions in subsection (3).
(3)
Those assumptions are that—
(a)
the company disposed of the relevant contract immediately before the beginning of the second period mentioned in subsection (1), and
(b)
the disposal was for consideration of an amount equal to the value (if any) given to the relevant contract in the accounts of the company at the end of the first such period.