Corporation Tax Act 2009 section 664

Meaning of certain expressions in section 663

Section 664 defines the key terms and calculations used in section 663, which deals with derivative contracts taxed on a chargeable gains basis.

• Where losses from derivative contracts taxed on a chargeable gains basis exceed the gains, the company has a net section 641 loss equal to that excess; where gains exceed the combined total of such losses and any other allowable losses set against those gains, the company has a net section 641 gain equal to that excess.
• When determining how much of a company's other allowable losses are set against its derivative contract gains, you must assume that those other losses are first set against the company's other chargeable gains before any remainder is allocated against the derivative contract gains.
• The "appropriate fraction" is a time-apportionment calculation: the number of days in the gains period that fall within the relevant 24-month window, divided by the total number of days in the gains period.
• Non-section 641 gains and losses are, respectively, any chargeable gains or allowable losses of the company for the accounting period that do not arise from derivative contracts taxed under section 641.