C2.1012 Dealings in futures, traded options and financial options
The tax treatment of options by a company (but not an authorised unit trust or an open-ended investment company) to enter into an agreement which is designed to manage interest rate risk (interest rate options and currency rate options) is described in Division D1.81.
See also B2.433 regarding exchange rate fluctuations, and Division D1.7 regarding loan relationships.
Where the 1994 legislation or the 2002 legislation does not apply (in the case of taxpayers other than companies), any gains arising in the course of dealing in commodity or financial futures or qualifying options which would otherwise be chargeable to tax as miscellaneous income are treated as capital gains; this does not apply if the gains are realised in the course of a trade2.
A commodity or financial future means one for the time being dealt in on a recognised futures exchange (see C2.1010) and a qualifying option means a traded option or a financial option (see C2.1010, C2.1011)3.
This applies where the contract is closed out before completion by matching transactions. The closing out of the contract is deemed to be a disposal of the holder's outstanding obligations under that contract. Any consideration received, and any payment made, on the closing out of the contract are respectively treated as consideration for, or incidental costs of, the disposal of his obligations under it4.
The wasting asset rules do not apply as regards commodity and financial futures dealt in on a recognised futures exchange or to which an authorised