CFM52060 | Derivative contracts: the matters and computational rules: statutory insolvency arrangements

CTA09/S611

Release of liability in insolvency

Where a company is in a statutory insolvency arrangement, the counterparty to a derivative contract may release amounts due to be paid under the contract. CTA09/S611 ensures that this does not give rise to a taxable credit for the insolvent company - any resultant credit in the company’s accounts is disregarded.

‘Statutory insolvency arrangement’ is defined at CTA10/S1119 and explained at CFM33190.