Corporation Tax Act 2009 section 651

Credits and debits not to be brought into account under Part 3 or Part 5

Section 651 switches off the normal rules for bringing trading and non-trading credits and debits into account when certain chargeable-gains provisions apply to derivative contracts held by issuers of securities with embedded derivatives.

• Where the chargeable-gains rules for deemed options (sections 653–655) or deemed contracts for differences (section 658) apply to a derivative contract, the normal trading and non-trading credit/debit rules are disapplied
• The affected credits and debits are therefore not brought into account as trading income under Part 3 or as non-trading loan relationship amounts under Part 5
• Instead, those amounts are dealt with under the chargeable-gains regime for derivative contracts, as set out in the relevant sections
• The conditions that determine when these chargeable-gains provisions apply are set out in sections 652 and 656 respectively