Section 650 — Corporation Tax Act 2009: Property based total return swaps

Property based total return swaps 650 1 This section applies to a derivative contract of a company for an accounting period if each of conditions A to H is met.

2 Condition A is that the derivative contract is a contract for differences.

3 Condition B is that one or more indices are specified in the contract.

4 Condition C is that at least one index so specified (“the capital value index”) is an index of changes in the value of land.

5 Condition D is that the underlying subject matter of the derivative contract also includes interest rates.

6 Condition E is that the company is not a party to the derivative contract at any time in the accounting period for the purposes of a trade carried on by it.

7 Condition F is that the company is not an excluded body.

8 Condition G is that no two or more of the parties to the derivative contract are connected persons.

9 Condition H is that the securing of a tax advantage is neither the main purpose, nor one of the main purposes, for which the company is a party to the derivative contract. “ Tax advantage ” has the meaning given by section 1139 of CTA 2010.