Corporation Tax Act 2009 section 594

Overview of Chapter

Section 594 provides an overview of the chapter dealing with the general rules for calculating the taxable credits and allowable debits that companies must bring into account in relation to their derivative contracts.

• The chapter sets out how generally accepted accounting practice (GAAP) applies when determining profits and losses on derivative contracts, including guidance on related transactions and the meaning of "amounts recognised in determining a company's profit or loss"
• Specific rules address the application of fair value accounting and certain situations where the tax treatment departs from standard accounting practice, such as amounts relating to capital expenditure or amounts recognised in equity
• The chapter covers exchange gains and losses on derivative contracts, pre-contract or abortive expenses, and cases where amounts are recognised even though a company is not, or has ceased to be, a party to a derivative contract
• Additional provisions deal with companies that move abroad (ceasing to be UK resident or ceasing to hold a derivative contract for a UK permanent establishment) and the release of liabilities under statutory insolvency arrangements