Section 574 | Non-trading credits and debits to be brought into account under Part 5

(1)This section applies if, for an accounting period, there are credits or debits in respect of the derivative contracts of a company which are not brought into account in accordance with section 573.

(2)Those credits or debits—

(a)are to be treated as non-trading credits or non-trading debits (within the meaning of Part 5 (loan relationships)) for the period, and

(b)are accordingly to be brought into account in determining whether the company has non-trading profits or a non-trading deficit from its loan relationships for the period.

(2A)In the case of a non-UK resident company, subsection (2) needs to be read with section 5(3), (3A)(b) and (3B)(b) (territorial scope of charge to corporation tax).^F1

(3)For cases in which this section does not apply, see—

(a)section 616 (disapplication of fair value accounting for certain embedded derivatives), and

(b)Chapter 7 (chargeable gains arising in relation to derivative contracts).