SCHEDULES

SCHEDULE 6Accounting practice and related matters

Loan relationships with embedded derivatives

8

1

In section 116(8A) of TCGA 1992 (reorganisations, conversions and reconstructions: application of loan relationships regime in certain cases)—

a

after “shall have effect” insert “ , subject to subsection (8B) below, ”, and

b

for “that subsection” substitute “ subsection (6) above ”.

2

After that subsection insert—

8B

Subsection (8A) above does not apply where the relevant transaction is a conversion of securities occurring in consequence of the operation of the terms of any security or of any debenture which is not a security.

Expressions used in this subsection have the same meaning as they have for the purposes of section 132.

3

These amendments have effect in relation to transactions occurring after 26th May 2005.