Section 640 — Corporation Tax Act 2009: Credits and debits not to be brought into account under Part 5

Credits and debits not to be brought into account under Part 5 640 1 If any of the provisions in subsection (2) applies to a derivative contract of a company for an accounting period, section 574 (non-trading credits and debits to be brought into account under Part 5: loan relationships) does not apply to the relevant credits and debits.

2 The provisions are—

a section 643 (contracts relating to land or certain tangible movable property),

b section 645 (creditor relationships: embedded derivatives which are options),

c section 648 (creditor relationships: embedded derivatives which are exactly tracking contracts for differences),

and d section 650 (property based total return swaps).

3 For the meaning of “relevant credits” and “relevant debits”, see section 659.

4 For the treatment of the relevant credits and debits in the case of a derivative contract to which section 643, 645, 648 or 650 applies, see section 641 (derivative contracts to be taxed on a chargeable gains basis).