(1)Subject to subsections (2) and (3) below, stamp duty shall not be chargeable on any transfer of loan capital.
(2)Subsection (1) above does not apply to loan capital which, at the time when it is transferred, carries a right (exercisable then or later) of conversion into shares or other securities or to the acquisition of shares or other securities, including loan capital of the same description.
(3)Subsection (1) above does not apply to loan capital which, at the time when it is transferred or at any earlier time, carries or has carried—
(a)a right to interest the amount of which—
(i)exceeds a reasonable commercial return on the nominal amount of the capital; or
(ii)falls or has fallen to be determined to any extent by reference to the results of, or of any part of, a business or to the value of any property; or
(b)a right on repayment to an amount which exceeds the nominal amount of the capital and is not reasonably comparable with what is generally repayable (in respect of a similar nominal amount of capital) under the terms of issue of loan capital listed in the Official List of The Stock Exchange.
(4)Section 115 of the [1891 c. 39.] Stamp Act 1891, section 37 of the [1939 c. 41.] Finance Act 1939, section 65 of the [1971 c. 68.] Finance Act 1971 and Article 11 of the [1972/1100 (N.I.).] Finance (Northern Ireland) Order 1972 (composition for stamp duty on transfers of loan capital etc.) shall cease to have effect.
(5)In this section " loan capital" means—
(a)any debenture stock, corporation stock or funded debt (by whatever name known) issued by any body corporate or other body of persons formed or established in the United Kingdom or any capital raised by any such body, being capital which is borrowed, or has the character of borrowed money, whether it is in the form of stock or any other form; and
(b)stock or marketable securities issued by the government of any country or territory within the commonwealth outside the United Kingdom.
(6)This section shall be construed as one with the said Act of 1891.
(7)This section shall be deemed to have come into force on 17th May 1976.