Finance Act 1996

The Taxes Act 1988 U.K.

3 (1) At the end of subsection (5) of section 710 of the Taxes Act 1988 (meaning of “transfer”), there shall be inserted— U.K.

“(b) except as otherwise provided by subsections (1) and (3) of section 722A, does not include any transaction forming part of any such exchange as is mentioned in either of those subsections.”

(2) After subsection (13) of that section there shall be inserted the following subsections—

“(13A) Where a security is deemed to have been transferred by virtue of section 722A(1), the interest period in which the exchange in question takes place shall be treated as ending on the day on which it would have ended had the exchange not taken place.

(13B) Where a security is deemed to have been transferred by virtue of section 722A(3), the interest period in which the exchange in question takes place shall be treated as having begun on such day as shall for that purpose be specified in the security.”

4 U.K. In section 711 of the Taxes Act 1988 (interpretation of sections 710 and 712 to 728 of that Act), after subsection (6) there shall be inserted the following subsection—

“(6A) In any case where section 722A(1) or (3) applies, the deemed transfer shall be treated as made—

(a) without accrued interest in any such case where the exchange in question is made at any time after the balance has been struck for a dividend on the security but before the day on which that dividend is payable;

(b) with accrued interest in any other such case.”

5 U.K. In section 712(4) of the Taxes Act 1988 (meaning of “settlement day”), after “722” there shall be inserted “ , 722A ”.

6 U.K. In the Taxes Act 1988, the following section shall be inserted after section 722—

“722A Gilt strips: deemed transfer.

(1) For the purposes of sections 710 to 728, where a gilt-edged security is exchanged by any person for strips of that security the security shall be deemed to have been transferred by that person.

(2) Nothing in subsection (1) above shall have effect to cause any person to be treated as the transferee of any securities for the purposes of section 713(2)(b).

(3) For the purposes of sections 710 to 728, where strips of gilt-edged securities are exchanged by any person for a single gilt-edged security consolidating those strips, that security shall be deemed to have been transferred to that person.

(4) Nothing in subsection (3) above shall have effect to cause any person to be treated as the transferor of any securities for the purposes of section 713(2)(a).

(5) In this section—

“gilt-edged security” has the same meaning as in section 51A; and

“strip” means anything which, within the meaning of section 47 of the M1 Finance Act 1942, is a strip of a gilt-edged security.”

Marginal Citations

M1 1942 c. 21.

F1 7 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Sch. 40 para. 7 repealed (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 3 (with Sch. 2)