16(1)This paragraph applies if securities are issued by a company in pursuance of a direction of the Secretary of State under section 49 or 58 above.U.K.
(2)A share issued by the company is to be treated for the purposes of the Corporation Tax Acts as if it had been issued wholly in consideration of a subscription paid to the company of an amount equal to the nominal value of the share.
(3)A debenture issued by the company is to be treated for the purposes of the Corporation Tax Acts as if it had been issued—
(a)wholly in consideration of a loan made to the company of an amount equal to the principal sum payable under the debenture, and
(b)wholly and exclusively for the purposes of the trade carried on by the company.
(4)If a debenture issued by the company includes provision for the payment of a sum expressed as interest in respect of a period falling wholly or partly before the issue of the debenture, a payment made in pursuance of the provision in respect of the period is to be treated for the purposes of the Corporation Tax Acts as if the debenture had been issued at the commencement of the period and (accordingly) as interest on the principal sum payable under the debenture.
(5)This paragraph has effect subject to paragraphs 3, 4 and 17.
Commencement Information
I1Sch. 7 paras. 1-20 wholly in force at 1.2.2001, see s. 275(1) and S.I. 2001/57, art. 3(1), Sch. 2 Pt. I (subject to the transitional provision and saving in Sch. 2 Pt. II)