Corporation Tax Act 2009 section 581

"Future"

Section 581 defines what constitutes a "future" for the purposes of the derivative contracts rules in corporation tax, distinguishing genuine delivery-based futures from cash-settled contracts.

• A future is a contract to sell property at a future delivery date and at a price, both agreed when the contract is made.
• The price counts as agreed even if it is determined by reference to a market or exchange price, or if adjustments are made for variations in quantity or quality on delivery.
• Contracts that are purely cash-settled — where the parties simply pay each other the net difference rather than delivering any property — are excluded from the definition of a future (these fall instead within the definition of contracts for differences).
• Currency futures are not excluded by the cash-settlement rule: a future whose underlying subject matter is currency still qualifies as a future.