Commentary

D1.891 Contracts for differences separated from a debtor loan relationship

Corporate tax
Corporate tax | Commentary

D1.891 Contracts for differences separated from a debtor loan relationship

Corporate tax | Commentary

D1.891 Contracts for differences separated from a debtor loan relationship

Where an embedded derivative bifurcated from a debtor loan relationship and the embedded derivative is an exactly tracking contract for differences (see below) the underlying a matter of which is shares, subject to certain exceptions which are considered below, any non-trading debits or credits arising to the debtor company in respect of the embedded derivative are ignored in calculating its non-trading debits and credits for the purposes of the derivative contracts legislation1. This particular provision does not apply where the embedded derivative is an option, which is treated as a contract for differences for the purposes of the derivative contracts legislation because it contains provision for physical settlement, the underlying subject matter of the option is shares and

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