Part 7Derivative contracts

Chapter 8Further provision about chargeable gains and derivative contracts

Carry back of net losses on certain derivative contracts

663Contracts to which section 641 applies

(1)

This section applies in the case of a company if—

(a)

there are net section 641 losses for an accounting period (“the loss period”),

(b)

there are net section 641 gains for a previous accounting period (“the gains period”),

(c)

the gains period falls wholly or partly within the period of 24 months immediately preceding the start of the loss period, and

(d)

within two years after the end of the loss period the company makes a claim in respect of the whole or a part of the net section 641 losses for the loss period.

(2)

The net section 641 gains for the gains period are reduced (but not below nil) by the amount in respect of which the claim is made.

(3)

And the net section 641 losses for the loss period are reduced by the amount in respect of which the claim is made.

(4)

For the purposes of this section—

(a)

the net section 641 gains for a later period are reduced so far as possible before the net section 641 gains for an earlier period, and

(b)

where a gains period falls partly before the start of the 24 month period mentioned in subsection (1), only the appropriate fraction of the net section 641 gains for that period may be reduced.

(5)

For the meaning of “net section 641 gains”, “net section 641 losses” and “the appropriate fraction”, see section 664.