In certain cases where a company holds an index-linked loan or loan note that is bifurcated into a host debt contract and an embedded derivative which falls to be treated as a contract for differences for the purposes of the derivative contracts legislation, any profits or losses arising on the embedded derivative will be treated as giving rise to chargeable gains or allowable losses for the purposes of corporation tax on chargeable gains on the basis on which such profits or losses are recognised in the company's accounts1. Such treatment only applies to an investor.
In order for any profits or losses arising to an investor to be treated as chargeable gains or allowable losses the following conditions have to be satisfied:
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Web page updated on 17 Mar 2025 16:51