The European Single Currency (Taxes) Regulations 1998

Deemed capital payment

21.—(1) This regulation applies in a case where—

(a) there is a stock lending arrangement in relation to securities,

(b) a capital payment resulting from the euroconversion of those securities would, but for the arrangement, be received by the lender, and

(c) the stock lending arrangement does not include a requirement for the borrower to make a payment to the lender that is representative of the capital payment referred to in sub-paragraph (b).

(2) Subject to paragraph (3), the lender shall be treated, for all purposes of the Taxes Acts, as having received a capital payment in respect of the euroconversion of the securities concerned—

(a) on such date as it is reasonable to assume would have been, but for the arrangement, the first date on which the lender could have received the payment mentioned in paragraph (1)(b), and

(b) in an amount equal to the amount of the payment he could have received.

(3) Paragraph (2) shall not apply where the amount of the capital payment that the lender could have received is less than 500 euros.