Finance Act 1989

139 Corporate bonds. U.K.

(1) In relation to disposals on or after 14th March 1989 Chapter III of PartII of the M1 Finance Act 1984 shall have effect subject tothe following provisions of this section (and, in relation to such disposals,those provisions shall be regarded as always having had effect).

(2) In subsection (2) of section 64 (which defines “corporatebond” for the purposes of that section and accordingly for thepurposes of certain other enactments including, by virtue of section 64(1) ofthe M2 Capital Gains Tax Act 1979, that Act) paragraph (a)shall be omitted.

(3) After subsection (3) of section 64 there shall be inserted—

“(3A) For the purposes of this section “corporate bond” alsoincludes a security—

(a) which is not included in the definition in subsection (2) above, and

(b) which is a deep gain security for the purposes of Schedule 11 to theFinance Act 1989.

(3B) For the purposes of this section “corporate bond” alsoincludes a security—

(a) which is not included in the definition in subsection (2) above, and

(b) which, by virtue of paragraph 21(2) of Schedule 11 to the Finance Act1989, falls to be treated as a deep gain security as there mentioned.

(3C) For the purposes of this section “corporate bond” alsoincludes a security—

(a) which is not included in the definition in subsection (2) above, and

(b) which, by virtue of paragraph 22(2) of Schedule 11 to the Finance Act1989, falls to be treated as a deep gain security as there mentioned.”

(4) After subsection (5) of section 64 there shall be inserted—

“(5A) Subject to subsection (6) below, for the purposes of this section andSchedule 13 to this Act a corporate bond which falls within subsection (3A)above is a qualifying corporate bond, whatever the date of its issue; andsubsections (4) and (5) above shall not apply in the case of such a bond.

(5B) Subject to subsection (6) below, for the purposes of this section andSchedule 13 to this Act a corporate bond which falls within subsection (3B)above is a qualifying corporate bond as regards a disposal made after the timementioned in paragraph 21(1)(c) of Schedule 11 to the Finance Act 1989,whatever the date of its issue; and subsections (4) and (5) above shall notapply in the case of such a bond.

(5C) Subject to subsection (6) below, for the purposes of this section andSchedule 13 to this Act a corporate bond which falls within subsection (3C)above is a qualifying corporate bond as regards a disposal made after the timethe agreement mentioned in paragraph 22(1)(b) of Schedule 11 to the FinanceAct 1989 is made, whatever the date of its issue; and subsections (4) and (5)above shall not apply in the case of such a bond.”

(5) In subsection (6) of section 64, after the words “this Act” thereshall be inserted the words “except in relation to a disposal by a personwho (at the time of the disposal) is not a member of the same group as thecompany which issued the security”.

(6) In paragraph 10(2) of Schedule 13—

(a) after paragraph (b) there shall be inserted—

“(bb) section 267 of the Taxes Act (company reconstructions and amalgamations);or”and

(b) the word “not” shall be inserted after the words “previousdisposal”.

Marginal Citations

M1 1984 c. 43.

M2 1979 c. 14.