Corporation Tax Act 2009 section 601

Contract relating to holding in OEIC, unit trust or offshore fund

Section 601 requires that fair value accounting must be used when calculating the taxable credits and debits on certain contracts linked to collective investment schemes that are treated as derivative contracts.

• Applies where a company holds a contract treated as a derivative under section 587 because it relates to a holding in an OEIC, unit trust or offshore fund
• Section 587 catches contracts whose underlying subject matter includes a holding in a collective investment scheme that fails a "qualifying investments" test
• Credits and debits on such contracts must be determined using fair value accounting — the company cannot choose an alternative basis
• The relevant holding is the one that forms the underlying subject matter of the contract, not necessarily a holding owned directly by the company itself