Section 588 — Corporation Tax Act 2009: Associated transaction treated as derivative contract

Associated transaction treated as derivative contract 588 1 This section is to be read as if it were in Chapter 7 (shares with guaranteed returns etc) of Part 6 (relationships treated as loan relationships etc).

2 See, in particular— section 526(2) (meaning of “non-qualifying share”), and section 532 (meaning of “ associated transaction ” and “ the associated transactions condition ”).

3 Subsection (4) applies in a case which falls within section 523(1)(b)(ii) (loan relationships: non-qualifying shares) because the share mentioned in section 523(1)(a) is a non-qualifying share as a result of the associated transactions condition being met.

4 An associated transaction is treated for the purposes of this Part as a derivative contract or a transaction in respect of a derivative contract if it is not in fact such a contract or transaction.

5 For the way in which credits and debits are to be brought into account where subsection (4) applies, see section 603 (application of fair value accounting).