Corporation Tax Act 2009 section 675

Transfer of derivative contract at notional carrying value

Section 675 establishes the rule for determining the transfer value of derivative contracts when they are transferred as part of a business transfer, ensuring that both parties use the notional carrying value from the transferor's accounts.

• When a derivative contract is transferred as part of a business transfer, the transfer is treated as taking place at the contract's notional carrying value for the purpose of calculating tax credits and debits
• Both the transferor and the transferee must use this notional carrying value as the deemed consideration for the transfer
• The notional carrying value is the tax-adjusted carrying value that would have appeared in the transferor's accounts if a period of account had ended immediately before the transferor ceased to be a party to the contract
• This rule is overridden where the transferor uses fair value accounting, in which case separate provisions apply under section 676