Corporation Tax Act 2009 section 609

Company ceasing to be UK resident

Section 609 deals with the tax consequences for derivative contracts when a company ceases to be UK resident, triggering a deemed disposal and reacquisition at fair value.

• When a company ceases to be UK resident, it is treated as having disposed of and immediately reacquired its derivative contracts at fair value, crystallising any gains or losses for corporation tax purposes.
• This deemed disposal does not apply to derivative contracts that remain connected to a UK permanent establishment, a trade of dealing in or developing UK land, a UK property business, or activities generating other UK property income.
• The deemed disposal rule is also disapplied where the company's departure from UK residence coincides with it leaving a group, and the company had previously replaced another group member as party to the derivative contract under the intra-group transfer rules.
• The deemed reacquisition value becomes the starting value for any future corporation tax computation should the derivative contract later come back within the charge to corporation tax.