Income Tax (Trading and Other Income) Act 2005 section 779

Gains on commodity and financial futures

Section 779 provides an exemption from income tax for gains arising from dealing in certain types of futures and options, ensuring these gains are not caught by the residual income tax charge on otherwise untaxed income.

• Gains from dealing in commodity or financial futures, traded options, or financial options are exempt from income tax under the residual charging provisions
• Commodity or financial futures must be dealt in on a recognised futures exchange to qualify for the exemption
• The exemption extends to gains treated as arising from futures dealing even where the transaction takes place off-exchange but involves authorised persons
• The definitions of "financial option" and "traded option" follow those used in the capital gains tax legislation