Taxation (International and Other Provisions) Act 2010 section 450

Banking companies

Section 450 provides special rules for banking companies whose trading activities include dealing in financial instruments, broadening the scope of what counts as tax-interest expense and income to capture debits and credits arising from such dealing activities.

• Debits arising directly from dealing in financial instruments (other than impairment losses) are treated as tax-interest expense amounts for the banking company.
• Credits arising directly from dealing in financial instruments (other than reversals of impairment losses) are treated as tax-interest income amounts.
• Losses and gains from dealing in financial instruments (excluding impairment losses and their reversals) are also included when calculating the company's relevant expense and relevant income amounts for the group ratio calculations.
• Financial instruments for these purposes include loan relationships, derivative contracts, and shares or other securities.