Taxation of Chargeable Gains Act 1992 (c. 12)

Part VII U.K. Other property, businesses, investments etc.

Miscellaneous reliefs and exemptions U.K.

[F1 263B Stock lending arrangements. U.K.

(1) In this section “stock lending arrangement” means so much of any arrangements between two persons (“the borrower” and “the lender”) as are arrangements under which—

(a) the lender transfers securities to the borrower otherwise than by way of sale; and

(b) a requirement is imposed on the borrower to transfer those securities back to the lender otherwise than by way of sale.

(2) Subject to the following provisions of this section and [F2 sections 263C(2) and 263CA(3) and (5)], the disposals and acquisitions made in pursuance of any stock lending arrangement shall be disregarded for the purposes of capital gains tax.

(3) Where—

(a) the borrower under any stock lending arrangement disposes of any securities transferred to him under the arrangement,

(b) that disposal is made otherwise than in the discharge of the requirement for the transfer of securities back to the lender, and

(c) that requirement, so far as it relates to the securities disposed of, has been or will be discharged by the transfer of securities other than those transferred to the borrower,

any question relating to the acquisition of the securities disposed of shall be determined (without prejudice to the provisions of Chapter I of Part IV) as if the securities disposed of were the securities with which that requirement (so far as relating to the securities disposed of) has been or will be discharged.

(4) Where, in the case of any stock lending arrangement, it becomes apparent, at any time after the making of the transfer by the lender, that the requirement for the borrower to make a transfer back to the lender will not be complied with—

(a) the lender shall be deemed for the purposes of this Act to have made a disposal at that time of the securities transferred to the borrower [F3 for a consideration equal to their market value at that time];

(b) the borrower shall be deemed to have acquired them at that time [F4 for that consideration]; and

(c) subsection (3) above shall have effect in relation to any disposal before that time by the borrower of securities transferred to him by the lender as if the securities deemed to have been acquired by the borrower in accordance with paragraph (b) above were to be used for discharging a requirement to transfer securities back to the lender.

[F5 This subsection does not apply where section 263CA (insolvency of borrower) applies.]

(5) References in this section, in relation to a person to whom securities are transferred, to the transfer of those securities back to another person shall be construed as if the cases where those securities are taken to be transferred back to that other person included any case where securities of the same description as those securities are transferred to that other person either—

(a) in accordance with a requirement to transfer securities of the same description; or

(b) in exercise of a power to substitute securities of the same description for the securities that are required to be transferred back.

(6) For the purposes of this section securities shall not be taken to be of the same description as other securities unless they are in the same quantities, give the same rights against the same persons and are of the same type and nominal value as the other securities.

[F6 (7) In this section “securities” has the meaning given by section 263AA.]]

Textual Amendments

F1 Ss. 263B, 263C inserted (with effect in accordance with Sch. 10 para. 7(1) of the amending Act) by Finance Act 1997 (c. 16), Sch. 10 para. 5(1); S.I. 1997/991, art. 2

F2 Words in s. 263B(2) substituted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 13 para. 2(2) (with Sch. 13 para. 4(1)(2))

F3 Words in s. 263B(4)(a) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 13 para. 2(3)(a)

F4 Words in s. 263B(4)(b) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 13 para. 2(3)(b)

F5 Words in s. 263B(4) inserted (21.7.2009) by Finance Act 2009 (c. 10), Sch. 13 para. 2(3)(c) (with Sch. 13 para. 4(1)(2))

F6 S. 263B(7) substituted (1.1.2014) by Finance Act 2013 (c. 29), Sch. 29 paras. 5, 52

Modifications etc. (not altering text)

C1 S. 263B modified (1.1.1999) by The European Single Currency (Taxes) Regulations 1998 (S.I. 1998/3177), regs. 1, 22(2)