Section 574 Non-trading credits and debits to be brought into account under Part 5

United Kingdom

(1)

This section applies if, for an accounting period, there are credits or debits in respect of the derivative contracts of a company which are not brought into account in accordance with section 573.

(2)

Those credits or debits—

(a)

are to be treated as non-trading credits or non-trading debits (within the meaning of Part 5 (loan relationships)) for the period, and

(b)

are accordingly to be brought into account in determining whether the company has non-trading profits or a non-trading deficit from its loan relationships for the period.

F1(2A)

In the case of a non-UK resident company, subsection (2) needs to be read with section 5(3), (3A)(b) and (3B)(b) (territorial scope of charge to corporation tax).

(3)

For cases in which this section does not apply, see—

(a)

section 616 (disapplication of fair value accounting for certain embedded derivatives), and

(b)

Chapter 7 (chargeable gains arising in relation to derivative contracts).

Annotations

Textual amendments

F1: S. 574(2A) inserted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 18, 35 (with Sch. 5 para. 36); and substituted (6.4.2020) by Finance Act 2020 (c. 14), Sch. 6 paras. 2, 10

Notes on Part 7

Modifications

C1: Pt. 7 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)
C2: Pt. 7 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)
C3: Pt. 7 modified by 2007 c. 3, s. 809FZZ(8) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))
C4: Pt. 7 modified (for the tax year 2026-27 and subsequent tax years (but in relation to investment management services whenever performed)) by 2005 c. 5, Sch. A1 para. 35(6) (as inserted by Finance Act 2026 (c. 11), s. 58(6), Sch. 11 para. 1)