Taxation of Chargeable Gains Act 1992

[F1263A [F2Agreements for sale and repurchase of securities: capital gains tax]U.K.

[F3(A1)For the purposes of this section there is a repo in respect of securities if—

(a)a person (“the original owner”) has agreed to sell the securities to another person (“the interim holder”), and

(b)the original owner or a person connected with the original owner—

(i)is required to buy back the securities by the agreement or a related agreement,

(ii)is required to buy back the securities as a result of the exercise of an option acquired under the agreement or a related agreement, or

(iii)exercises an option to buy back the securities which was acquired under the agreement or a related agreement.]

(1)[F4Subject to subsections (3) and (4) below, in any case [F5where under a repo in respect of securities the original owner has transferred the securities to the interim holder]]—

(a)the acquisition of the securities in question by the interim holder and the disposal of those securities by him to the repurchaser, and

(b)except where the repurchaser is or may be different from the original owner, the disposal of those securities by the original owner and any acquisition of those securities by the original owner as the repurchaser,

shall be disregarded for the purposes of capital gains tax.

[F6(1A)If, at any time after the acquisition mentioned in subsection (1)(a) above, it becomes apparent that the interim holder will not dispose of the securities to the repurchaser, the interim holder shall be treated for the purposes of capital gains tax as acquiring them at that time for a consideration equal to their market value at that time.

(1B)If, at any time after the disposal mentioned in subsection (1)(b) above, it becomes apparent that the original owner will not acquire the securities as the repurchaser, the original owner shall be treated for the purposes of capital gains tax as disposing of them at that time for a consideration equal to their market value at that time.]

F7(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Subsection (1) above does not apply if—

(a)the agreement or agreements under which provision is made for the sale and repurchase are not such as would be entered into by persons dealing with each other at arm’s length; or

(b)any of the benefits or risks arising from fluctuations, before the repurchase takes place, in the market value of the securities sold accrues to, or falls on, the interim holder.

(4)Subsection (1) above does not apply in relation to any disposal or acquisition of qualifying corporate bonds in a case where the securities disposed of by the original owner or those acquired by him, or by any other person, as the repurchaser are not such bonds.

F8[F9(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)This section does not apply for the purposes of corporation tax in respect of chargeable gains.]]

Textual Amendments

F1S. 263A inserted (with effect in accordance with s. 80(5) of the amending Act) by Finance Act 1995 (c. 4), s. 80(4)

F2S. 263A heading substituted (with effect in relation to an arrangement that comes into force on or after 1.10.2007) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 12(6); S.I. 2007/2483, art. 3

F3S. 263A(A1) inserted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by Finance Act 2013 (c. 29), Sch. 12 para. 9(2)

F4Words in s. 263A(1) substituted (with effect in relation to an arrangement that comes into force on or after 1.10.2007) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 12(2); S.I. 2007/2483, art. 3

F5Words in s. 263A(1) substituted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by Finance Act 2013 (c. 29), Sch. 12 para. 9(3)

F6S. 263A(1A)(1B) inserted (with effect in relation to an arrangement that comes into force on or after 1.10.2007) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 12(3); S.I. 2007/2483, art. 3

F7S. 263A(2) repealed (with effect in relation to an arrangement that comes into force on or after 1.10.2007) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 12(4), Sch. 27 Pt. 2(14); S.I. 2007/2483, art. 3

F8S. 263A(5) omitted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 12 para. 9(4)

F9S. 263A(5)(6) substituted (with effect in relation to an arrangement that comes into force on or after 1.10.2007) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 12(5); S.I. 2007/2483, art. 3

Modifications etc. (not altering text)

C2S. 263A applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Sale and Repurchase of Securities (Modification of Enactments) Regulations 2007 (S.I. 2007/2486), regs. 1(1), 2(2), 4