Where a contract was entered into before 1 August 2004 in an accounting period ending after 16 September 2004, it was (and remains) excluded from the derivative contracts legislation where its underlying subject matter consists of land (wherever situated) or tangible movable property (other than commodities which are tangible assets). Such contracts are taxed instead on a chargeable gains basis (see D1.883)1.
An interest rate is not regarded as an underlying subject matter just because the contract specifies that settlement can be made on a variable date and that the amount of the payment will vary by a rate of interest according to the date it is made2.
A derivative contract that satisfies the accounting test (see D1.815) will only fall outside the derivative contracts legislation where the derivative contract:
• is an option or a future and the underlying subject matter of that contract is intangible fixed assets3. An intangible fixed asset has the meaning adopted for accounting purposes. It includes
Web page updated on 17 Mar 2025 16:25
