Income and Corporation Taxes Act 1988

129 Stock lending.U.K.

M1(1)Subject to [F1subsections (2B) and (4)] below, this section applies where a person (“A”) F2. . . enters into an arrangement under which—

(a)another person (“B”) is to transfer securities to A or his nominee; and

(b)in return securities of the same kind and amount are to be transferred (whether or not by A or his nominee) to B or his nominee.

(2)Subject to subsection (4) below, this section also applies where, to enable B to make the transfer to A or his nominee, B enters into an arrangement under which—

(a)another person (“C”) is to transfer securities to B or his nominee; and

(b)in return securities of the same kind and amount are to be transferred (whether or not by B or his nominee) to C or his nominee.

[F3(2A)Subject to subsection (4) below—

(a)this section also applies where an arrangement in addition to those mentioned in subsections (1) and (2) above, and similar to that mentioned in subsection (2) above, is entered into as part of a chain of arrangements all having the effect of enabling [F4B to make the transfer to A or his nominee], and

(b)it is immaterial how many separate arrangements there are in the chain.]

[F5(2B)Except in so far as the Treasury by regulations otherwise provide, this section applies only if A enters into the arrangement mentioned in subsection (1) above to enable him to fulfil a contract under which he is required to sell securities.]

(3)Any transfer made in pursuance of an arrangement mentioned in subsection (1) or (2) [F6or (2A)] above shall not be taken into account for the purposes of the Tax Acts in computing the profits or losses of any trade carried on by the transferor or transferee.

(4)The Treasury may provide by regulations that this section or any provision of it or section [F7271(9) of the 1992 Act] does not apply unless such conditions as are specified in the regulations are fulfilled; and the conditions may relate to the capacity in which any person involved in any arrangement is acting, the Board’s approval of any such person or of the arrangement, the nature of the securities or otherwise.

[F8(4A)Regulations under subsection (4) above relating to section 271(9) of the 1992 Act may include provision modifying the operation of that Act in relation to cases where, by virtue of the regulations, any acquisition or disposal is excluded from those which are to be disregarded for the purposes of capital gains tax.

(4B)In such cases as the Treasury may by regulations provide, this section shall have effect as if references to a transfer of securities of the same kind and amount as those subject to a previous transfer included references to the grant of equivalent rights in respect of benefits accruing from the redemption of securities of the same kind and amount.]

(5)In this section “securities” includes stocks and shares.

(6)This section applies to transfers made after such date as is specified for this purpose by regulations made under section 61 of the Finance Act 1986 or, if no such regulations have been made before 6th April 1988, under this section.

Textual Amendments

F1Words in s. 129(1) substituted (1.5.1995) by Finance Act 1995 (c. 4), s. 84(1)(a)

F4Words in s. 129(2A) substituted (1.5.1995) by Finance Act 1995 (c. 4), s. 84(2)

F7Words in s. 129(4) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 14(8) (with ss. 60, 101(1), 171, 201(3)).

Modifications etc. (not altering text)

C1 See 1990 s.56and Sch.10 para.23—convertible securities.

C2 For regulations see S.I. 1989 No.1299in Part III Vol.5in relation to transfers after 17August 1989.

Marginal Citations

M1Source—1986 s.61