Corporation Tax Act 2009 section 637

Investment trusts: profits or losses of a capital nature

Section 637 excludes capital profits and losses arising from derivative contracts held by investment trusts from the derivative contracts tax rules.

• Capital profits or losses from derivative contracts held by investment trusts are excluded from the corporation tax rules on derivative contracts
• Capital profits or losses are those recorded (or that should be recorded) in the capital column of the income statement under the relevant Statement of Recommended Practice (SORP)
• The applicable SORP is the one issued by the Association of Investment Trust Companies in January 2003, or any subsequent replacement, including any modifications or revisions
• The Treasury has the power to amend the definition of capital profits or losses by order, specifically for investment trusts that prepare accounts under international accounting standards