Corporation Tax Act 2009 section 593

Contracts where part of underlying subject matter is excluded property

Section 593 requires an option or future whose underlying subject matter is a mixture of excluded property and other property to be split into two notional contracts for corporation tax purposes.

• Where an option or future that meets the accounting conditions has underlying subject matter consisting partly of excluded property and partly of other property, it must be treated as two separate contracts
• One notional contract covers the excluded property element and the other covers the remaining underlying subject matter
• All amounts relating to the contract must be split between the two notional contracts on a just and reasonable basis
• This splitting rule does not apply where the contract has already been treated as consisting wholly of excluded property under the subordinate or small value rule in section 590