Section 668 — Corporation Tax Act 2009: Shares acquired on running of future to delivery

Shares acquired on running of future to delivery 668 1 This section applies if—

a a company is a party to a derivative contract in an accounting period, b the derivative contract is a plain vanilla contract, c the contract is a future, and d delivery is taken of shares in accordance with the terms of the future.

2 For the purpose of calculating any chargeable gain accruing to the company on a disposal by it of all the shares so delivered, the sums allowable as a deduction under section 38(1)(a) of TCGA 1992 (acquisition costs) are—

a if G exceeds L, increased by the amount of that excess, b if L exceeds G, reduced by the amount of that excess, and, in the case of a part disposal of those shares, section 42(2) of that Act (part disposals) has effect accordingly.

3 If the amount of the excess in subsection (2)(b) is greater than the amount of expenditure allowable under section 38(1)(a) of TCGA 1992, the amount of the excess which cannot be deducted from the expenditure so allowable is, for the purpose mentioned in subsection (2), added to the amount of the consideration for the disposal of the shares.

4 For the meaning of G and L, see section 669.