Commentary

D1.805 Scope of the derivatives legislation

Corporate tax
Corporate tax | Commentary

D1.805 Scope of the derivatives legislation

Corporate tax | Commentary

Division D1.8     Derivative contracts

Revised by JOHN LINDSAY BA, FCA, FTII,

Consultant, Linklaters

For updates affecting this Division please see Part D0 Updates

Derivative contracts—overview

D1.805 Scope of the derivatives legislation

The derivative contracts legislation in CTA 2009, ss 570–710 (Pt 7) applies to profits and losses arising on futures, options and contracts for differences. Generally, in order for a derivative contract to fall within the derivative contracts legislation it has to fall within the definition of a derivative that is contained in FRS 25 or any successor standard1. There are a number of exceptions to this rule (see D1.815–D1.820).

Generally, profits and losses arising on derivative contracts that fall within the derivative contracts legislation are included in computing a company's derivative contract profits on the basis on which they are recognised in its accounts in accordance with generally accepted accounting practice. For accounting periods beginning on or after 1 January 2016, debits and credits arising on a derivative contract are normally brought into account

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