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HMRC internal manual

Savings and Investment Manual

Artificial transactions in futures and options: the return from ‘one or more disposals’ (this guidance applies to disposals of futures and options before 6 April 2013)

The net result of one or more disposal may be considered

In order to ascertain whether there is a guaranteed return for the purposes of Chapter 12 of Part 4 of ITTOIA05, section 559 requires a consideration of ‘the return from the disposal’. The basic charge in ITTOIA05/S555 is on a profit or gain from an individual disposal. But in deciding whether there is a guaranteed return, ITTOIA05/S561 allows more than one disposal in the scheme or arrangement to be taken into account, and the net result considered - that is to say, the profits or gains less losses on those disposals.

Where more than one person enters into transactions but those transactions are part of the same scheme or arrangements then the net return is computed by assuming that the profits or losses from all of those transactions are realised or made by the same person. It covers schemes or arrangements (whether or not legally enforceable) where the share of each person entering into the scheme is to any extent determined from the net profit generated by the scheme. For example, where members of the same family enter into different parts of the scheme but the profit or loss of each person is calculated separately.