Section 622 Contracts ceasing to be derivative contracts

United Kingdom

(1)

This section applies if a company is a party to a relevant contract which ceases to be a derivative contract.

(2)

The company is treated for the purposes of this Part as if it had disposed of the contract in a related transaction at the relevant time for consideration of an amount equal to the notional carrying value of the contract at that time.

(3)

In this section “the relevant time” means the time when the contract ceases to be a derivative contract.

(4)

For the purposes of this section, the “notional carrying value” of the contract at the relevant time is the amount which would have been F1the tax-adjusted carrying value of the contract based on the accounts of the company if a period of account had ended immediately before that time.

(5)

See also section 662 (chargeable gains provision for contracts ceasing to be derivative contracts).

Annotations

Textual amendments

F1: Words in s. 622(4) substituted (with effect in accordance with Sch. 7 Pt. 6 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 7 para. 78

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)