CTA09/S659(3)-(6)

Tax treatment of property-based total return swaps

Where all of the conditions at CFM55100 are met, part of the debits or credits computed under the normal derivative contracts rules is brought into account under CTA09/S641 as a chargeable gain or allowable loss. Under S659(4), this amount is given by the formula:

S641 credit or debit = R% x N,

where N is the notional principal amount of the contract, and R% is the percentage change (if any) in the capital value index for the relevant period.

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