Commentary on Sections Overview Chapter 1: Introduction Section 573: Trading credits and debits to be brought into account under Part 3
1503.This section provides for the treatment of credits and debits if the company is a party to the derivative contract for the purposes of a trade it carries on. It is based on paragraph 14(2) and (4) of Schedule 26 to FA 2002.
1504.Credits and debits are treated respectively as receipts and expenses of the company’s trade. Profits and losses in respect of the derivative contract are therefore charged under Part 3 (trading income).
1505.The provisions referred to in subsection (4) are those that would otherwise prevent a debit being taken into account as an expense of the trade.
1506.The provisions referred to in subsection (5) disapply this section, either because the contract in question is taken outside the scope of this Part or because credits and debits are taken into account instead in computing chargeable gains.