Corporation Tax Act 2009 section 580

"Option"

Section 580 defines what counts as an "option" for the purposes of the derivative contracts rules in Part 7 of the Corporation Tax Act 2009.

• The term "option" includes warrants and otherwise takes its ordinary meaning
• Cash-settled options (contracts that only involve cash payments between the parties and do not provide for delivery of any property) are excluded from the definition of "option" and instead fall within the rules for contracts for differences
• Options whose underlying subject matter is currency remain within the definition of "option" even if they are cash-settled
• Certain specific provisions (sections 652, 665 and 695) override the cash-settlement exclusion, so that "option" in those contexts includes cash-settled options as well