Section 583 — Corporation Tax Act 2009: “Underlying subject matter”

“Underlying subject matter” 583 1 In this Part references to the underlying subject matter of a relevant contract are to be read as follows.

2 The underlying subject matter of an option is—

a the property which would fall to be delivered if the option were exercised, or b if the property which would so fall is a derivative contract, the underlying subject matter of that contract.

3 The underlying subject matter of a future is—

a the property which, if the future were to run to delivery, would fall to be delivered at the date and price agreed when the contract is made, or b if the property which would so fall is a derivative contract, the underlying subject matter of that contract.

4 The underlying subject matter of a contract for differences is—

a if the contract for differences relates to fluctuations in the value or price of property described in the contract, the property so described, or b if an index or factor is designated in the contract for differences, the matter by reference to which the index or factor is determined.

5 The things which may be the subject matter of a contract for differences include—

a interest rates, b weather conditions, and c creditworthiness.

6 Interest rates are not the underlying subject matter of a relevant contract if—

a under the terms of that contract—

i the date on which a party to that contract becomes subject to a duty to make a payment is a variable date, and ii the amount of that payment varies according to the date of payment, and b those terms refer to an interest rate only for the purpose of establishing that amount.

7 The underlying subject matter of a relevant contract is not treated as being—

a land, b shares in a company, or c rights of a unit holder under a unit trust scheme, just because its underlying subject matter includes income from that kind of property.