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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Investment trusts: Loan relationships, derivatives and management expenses: Financial futures, options and warrants

ICTA88/S128 and TCGA92/S143

Section 128 ICTA 1988 and section 143 TCGA 1992 provide, broadly, that transactions in financial futures and options will be treated as capital in nature unless they are regarded as being on revenue account as profits or losses of a trade. Whether such a transaction is a trading transaction or on capital account is a question of fact and degree which can only be determined by reference to all of the facts and circumstances of a particular case.

SP03/02, issued on 16 October 2002, set out our views on the tax treatment of transactions in financial futures and options.