Income and Corporation Taxes Act 1988

732 Dealers in securities. U.K.

M1 (1) Subject to the provisions of this section, if the first buyer is engaged in carrying on a trade which consists of or comprises dealing in securities, then, in computing for any of the purposes of the Tax Acts the profits arising from or loss sustained in the trade, the price paid by him for the securities shall be reduced by the appropriate amount in respect of the interest, as determined in accordance with section 735.

[F1 (1A) Subsection (1) above shall not apply if the interest receivable by the first buyer falls to be taken into account [F2 either—

(a) by virtue of section 366(1) of ITTOIA 2005 in computing profits chargeable to income tax under Chapter 2 of Part 2 of that Act, or

(b) by virtue of section 95(1) of this Act in computing profits chargeable to corporation tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.]]

(2) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F4 (2A) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(3) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Subsection (1) above shall not apply if the securities are overseas securities bought by the first buyer F6 . . . in the ordinary course of his trade as a dealer in securities and the following conditions are satisfied, namely—

(a) the interest is brought into account in computing for the purposes of the Tax Acts the profits arising from or loss sustained in the trade, and

(b) where credit against tax would fall to be allowed in respect of the interest under section 788 or 790, the first buyer elects that credit shall not be so allowed.

[F7 In this subsection “overseas securities” means securities issued—

(a) by a government or public or local authority of a territory outside the United Kingdom; or

(b) by any other body of persons not resident in the United Kingdom.]

(5) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F9 (5A) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(6) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F10 (7) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F1 S. 732(1A) inserted (with effect in accordance with s. 26(8) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 26(2)

F2 Words in s. 732(1A) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 303 (with Sch. 2)

F3 S. 732(2)(2A) repealed (with effect in accordance with s. 26(8) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 26(3), Sch. 8 Pt. 2(8), Note 2

F4 S. 732(2A) inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 56(1)

F5 S. 732(3) repealed (with effect in accordance with s. 159(1) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(21), Note; S.I. 1996/2646, art. 2

F6 Words in s. 732(4) repealed (with effect in accordance with s. 26(8) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 26(3), Sch. 8 Pt. 2(8), Note 2

F7 S. 732(4): definition of "overseas securities" substituted (with effect in accordance with s. 26(8) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 26(5)

F8 S. 732(5)-(7) repealed (with effect in accordance with s. 26(8) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 26(6)(7), Sch. 8 Pt. 2(8), Note 2

F9 S. 732(5A) inserted (retrospectively) by Finance Act 1990 (c. 29), s.53(1)

F10 S. 732(7) added by Finance Act 1991 (c. 31, SIF 63:1), s. 56(2)

Marginal Citations

M1 Source—1970 s.472; 1982 s.57; 1986 Sch.18 1, 3