Corporation Tax Act 2009 section 659

Meaning of "relevant credits" and "relevant debits"

Section 659 defines what counts as "relevant credits" and "relevant debits" for the purposes of Chapter 7, which deals with chargeable gains arising from derivative contracts.

• For most derivative contracts, the relevant credits and debits are simply those determined under the normal rules for bringing amounts into account (section 595).
• For property-based total return swaps (covered by section 650), relevant credits and debits are limited to amounts calculated by applying the percentage change in a capital value index to the notional principal amount of the contract.
• Where the contract caps the return linked to the index at a percentage closer to zero than the actual index movement, the capped percentage is used instead of the full percentage change.
• The relevant period for the calculation is either the full accounting period or, if the company was not party to the contract throughout, only the part of the period during which it held the contract.