Section 475A — Corporation Tax Act 2009: “Hedging relationship”

“Hedging relationship” 475A 1 This section applies for the purposes of this Part.

2 A company has a “hedging relationship” between a relevant contract (“the hedging instrument”) and an asset or liability (“the hedged item”) so far as condition A or B is met.

3 Condition A is that the hedging instrument and the hedged item are designated as a hedge by the company.

4 Condition B is that—

a the hedging instrument is intended to act as a hedge of the exposure to changes in fair value of the hedged item which is attributable to a particular risk and could affect the profit or loss of the company, and b the hedged item is an asset or liability recognised for accounting purposes or is an identified portion of such an asset or liability.

5 For the purposes of subsections (2) and (4), the liabilities of a company include its own share capital.