Corporation Tax Act 2009 section 610

Non-UK resident company ceasing to hold derivative contract for section 609(2) purposes

Section 610 deals with what happens when a non-UK resident company's derivative contract ceases to be connected to its UK permanent establishment, triggering a deemed disposal and reacquisition at fair value for corporation tax purposes.

• When a non-UK resident company's derivative contract stops being held for the purposes of its UK permanent establishment (other than through an actual disposal), the company is treated as having sold and immediately rebought the contract at fair value
• This deemed disposal and reacquisition crystallises any gains or losses for corporation tax purposes at the point the contract leaves the scope of UK tax
• The section does not apply where the contract ceases to be held because of an actual disposal (a "related transaction"), since that disposal itself generates taxable amounts
• An exception also applies where a company leaves a corporate group and certain group transfer conditions are met — in that case, separate group departure rules take priority over this section