# The Finance Act 2002, Schedule 26, (Parts 2 and 9) (Amendment) Order 2006, Article 27: Amendment of paragraph 45M of Schedule 26


(1) Amend paragraph 45M (treatment of host contract as a loan relationship) as follows.
(2) For sub-paragraphs (1) and (2) substitute—
“(1) This paragraph applies where for an accounting period—
(a) a company is party to a hybrid derivative contract falling within paragraph 3(1)(b),
(b) the nested derivative is a derivative contract falling within paragraph 3(1)(a),
(c) the underlying subject matter of the derivative contract consists, or is treated as consisting, wholly of—
(i) shares in a company, or
(ii) rights of a unit holder under a unit trust scheme, and
(d) the quasi-derivative host contract is treated for accounting purposes as, or as forming part of, a financial asset.
(2) Where this paragraph applies—
(a) the quasi-derivative host contract shall be treated for the purposes of the Corporation Tax Acts as if it were a creditor relationship of the company, and
(b) the nested derivative shall be treated—
(i) as satisfying the conditions in paragraph 4(2A), and
(ii) as a chargeable asset (within the meaning of paragraph 4A(4)).”.
(3) Omit sub-paragraphs (5) and (6).

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Source: https://www.legislation.gov.uk/uksi/2006/3269/article/27 (the official version)
Page: https://openlegislation.uk/finance-act-2002-schedule-26-parts-2-and-9-amendment-order-2006/article-27
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.