Section 400 — Corporation Tax Act 2009: Adjustments for changes in index

Adjustments for changes in index 400 1 This section applies if—

a an amount to be brought into account for the purposes of this Part in respect of an index-linked gilt-edged security falls to be determined by reference to its value at two different times, and b there is a change in the relevant prices index between the earlier and the later time.

2 If that change is an increase, the carrying value of the security at the earlier time is increased by the same percentage as the percentage increase in the relevant prices index between those times. 2A Subsection (2) is subject to sections 400A to 400C (relevant hedging schemes).

3 If that change is a reduction, the carrying value of the security at the earlier time is reduced by the same percentage as the percentage reduction in the relevant prices index between those times.

4 The Treasury may, in relation to any description of index-linked gilt-edged securities, by order provide that—

a there are to be no adjustments under this section, or b an adjustment specified in the order is to be made instead.

5 An order under subsection (4)—

a may not apply to a security issued before the making of the order, but b may make different provision for different descriptions of securities.

6 The general rule is that the percentage increase or reduction in the relevant prices index is determined for the purposes of this section by reference to the difference between—

a the index for the month in which the earlier time falls, and b the index for the month in which the later time falls.

7 But if the earlier time falls at the beginning of an accounting period which begins with the first day of a month, the index for the previous month is used for the purposes of subsection (6)(a).