143Commodity and financial futures and qualifying options
(1)If, apart from section 128 of the Taxes Act, gains arising to any person in the course of dealing in commodity or financial futures or in qualifying options would constitute, for the purposes of the Tax Acts, profits or gains chargeable to tax under Schedule D otherwise than as the profits of a trade, then his outstanding obligations under any futures contract entered into in the course of that dealing and any qualifying option granted or acquired in the course of that dealing shall be regarded as assets to the disposal of which this Act applies.
(2)In subsection (1) above—
(a)“commodity or financial futures” means commodity futures or financial futures which are for the time being dealt in on a recognised futures exchange; and
(b)“qualifying option” means a traded option or financial option as defined in section 144(8).
(3)Notwithstanding the provisions of subsection (2)(a) above, where, otherwise than in the course of dealing on a recognised futures exchange—
(a)an authorised person or listed institution enters into a commodity or financial futures contract with another person, or
(b)the outstanding obligations under a commodity or financial futures contract to which an authorised person or listed institution is a party are brought to an end by a further contract between the parties to the futures contract,
then, except in so far as any gain or loss arising to any person from that transaction arises in the course of a trade, that gain or loss shall be regarded for the purposes of subsection (1) above as arising to him in the course of dealing in commodity or financial futures.
(4)In subsection (3) above—
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“authorised person” has the same meaning as in the [1986 c. 60.] Financial Services Act 1986, and
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“listed institution” has the same meaning as in section 43 of that Act.
(5)For the purposes of this Act, where, in the course of dealing in commodity or financial futures, a person who has entered into a futures contract closes out that contract by entering into another futures contract with obligations which are reciprocal to those of the first-mentioned contract, that transaction shall constitute the disposal of an asset (namely, his outstanding obligations under the first-mentioned contract) and, accordingly—
(a)any money or money’s worth received by him on that transaction shall constitute consideration for the disposal; and
(b)any money or money’s worth paid or given by him on that transaction shall be treated as incidental costs to him of making the disposal.
(6)In any case where—
(a)a person who, in the course of dealing in financial futures, has entered into a futures contract does not close out that contract (as mentioned in subsection (5) above), and
(b)the nature of the futures contract is such that, at its expiry date, the person concerned is entitled to receive or liable to make a payment in full settlement of all obligations under that contract,
then, for the purposes of this Act, he shall be treated as having disposed of an asset (namely, his outstanding obligations under the futures contract) and the payment received or made by him shall be treated as consideration for that disposal or, as the case may be, as incidental costs to him of making the disposal.
152Losses from miscellaneous transactions
(1)A person may make a claim for loss relief against miscellaneous income if in a tax year (“the loss-making year”) the person makes a loss in any relevant transaction.
(2)A transaction is a relevant one if, assuming there were profits or other income arising from it—
(a)those profits or that other income would be section 1016 income, and
(b)the person would be liable for income tax charged on those profits or that other income.
(3)The claim is for the loss to be deducted in calculating the person's net income for the loss-making year and subsequent tax years (see Step 2 of the calculation in section 23).
(4)But a deduction for that purpose is to be made only from the person's miscellaneous income.
(5)A person's miscellaneous income is so much of the person's total income as is—
(a)income or gains arising from transactions, and
(b)section 1016 income.
This is subject to subsection (6).
(6)If the loss was made by the person as a partner in a partnership, the transactions covered by subsection (5)(a) are limited to transactions entered into by the partnership.
(7)In calculating a person's net income for a tax year, deductions under this section from the person's miscellaneous income are to be made before deductions of any other reliefs from that miscellaneous income.
(8)In this section “section 1016 income” means income on which income tax is charged under or by virtue of any provision to which section 1016 applies [F1except that income on which income tax is charged under [F2regulation 17 of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001)] [F3or Chapter 9 of Part 4 of ITTOIA 2005] is not “section 1016 income” for the purposes of subsection (2)(a)].
(9)This section needs to be read with—
(a)section 153 (how relief works),
(b)section 154 (transactions in deposit rights), and
(c)section 155 (claims).
2Persons and gains chargeable to capital gains tax, and allowable losses
(1)Subject to any exceptions provided by this Act, and without prejudice to sections 10 and 276, a person shall be chargeable to capital gains tax in respect of chargeable gains accruing to him in a year of assessment during any part of which he is resident in the United Kingdom, or during which he is ordinarily resident in the United Kingdom.
(2)Capital gains tax shall be charged on the total amount of chargeable gains accruing to the person chargeable in the year of assessment, after deducting—
(a)any allowable losses accruing to that person in that year of assessment, and
(b)so far as they have not been allowed as a deduction from chargeable gains accruing in any previous year of assessment, any allowable losses accruing to that person in any previous year of assessment (not earlier than the year 1965-66).
(3)Except as provided by section 62, an allowable loss accruing in a year of assessment shall not be allowable as a deduction from chargeable gains accruing in any earlier year of assessment, and relief shall not be given under this Act more than once in respect of any loss or part of a loss, and shall not be given under this Act if and so far as relief has been or may be given in respect of it under the Income Tax Acts.