|
| |
|
645 | Charitable trusts etc |
| |
| |
(a) | an excluded transferor in relation to a transfer of securities by the |
| |
| |
(b) | an excluded transferee in relation to a transfer of securities to the |
| 5 |
| |
| if condition A or B is met. |
| |
(2) | Condition A is that if the person— |
| |
(a) | became entitled to any interest on the securities, and |
| |
(b) | applied it for charitable purposes only, |
| 10 |
| exemption could be granted in respect of the interest under section 532 |
| |
(exemption for certain savings and investment income that belongs to a |
| |
charitable trust and is applicable and applied to charitable purposes only). |
| |
(3) | Condition B is that if the person— |
| |
(a) | became entitled to any interest on the securities, and |
| 15 |
(b) | applied it for the purposes mentioned in section 533 (exemption for |
| |
public revenue dividends that are applied only for the repair of college |
| |
or church buildings etc), |
| |
| exemption could be granted in respect of the interest under that section. |
| |
(4) | For the transfer treated as occurring where charitable trusts over securities |
| 20 |
cease, see section 652 (securities ceasing to be held on charitable trusts). |
| |
646 | Pension scheme trustees |
| |
| |
(a) | an excluded transferor in relation to a transfer of securities by the |
| |
| 25 |
(b) | an excluded transferee in relation to a transfer of securities to the |
| |
| |
if, were the person to become entitled to interest on the securities, exemption |
| |
in respect of it would be allowable under section 186 of FA 2004 (exemption for |
| |
income from investments held for the purposes of a registered pension |
| 30 |
| |
647 | Makers of manufactured payments |
| |
(1) | This section applies if the manufactured payments conditions are met. |
| |
(2) | The manufactured payments conditions are that— |
| |
(a) | securities are transferred without accrued interest to a person (“the |
| 35 |
| |
(b) | the seller makes a contract for the sale of securities of that kind (“the |
| |
| |
(c) | any contract under which the securities are transferred to the seller, or |
| |
the seller’s contract itself, is a manufactured payments contract. |
| 40 |
(3) | The seller is an excluded transferee in relation to the transfer to the seller if the |
| |
nominal value of the securities subject to the seller’s contract equals or exceeds |
| |
that of the securities transferred to the seller. |
| |
|
| |
|
| |
|
(4) | The seller is an excluded transferor in relation to the transfer of securities under |
| |
| |
(5) | See section 663 (transfers without accrued interest to makers of manufactured |
| |
payments) for cases where that nominal value is less than that of the securities |
| |
transferred to the seller. |
| 5 |
(6) | In this section “manufactured payments contract” means a contract under |
| |
which the seller is required to pay another person manufactured interest or a |
| |
manufactured overseas dividend as mentioned in section 578 or 581. |
| |
Further transactions treated as transfers |
| |
648 | Strips of gilt-edged securities |
| 10 |
(1) | The exchange of a gilt-edged security for strips of that security is treated for the |
| |
purposes of this Chapter as a transfer of the security by the person who |
| |
| |
(2) | But no one is treated as the transferee. |
| |
(3) | The exchange of strips of a gilt-edged security for a single gilt-edged security |
| 15 |
consolidating those strips is treated for the purposes of this Chapter as a |
| |
transfer of the single security to the person who exchanges those strips. |
| |
(4) | But no one is treated as the transferor. |
| |
(5) | An exchange within subsection (1) or (3) is treated as a transfer without |
| |
accrued interest if it is made at any time after the balance has been struck for a |
| 20 |
dividend on the security but before the day on which that dividend is payable. |
| |
(6) | In any other case, such an exchange is treated as a transfer with accrued |
| |
| |
(7) | If an exchange is treated as a transfer under subsection (1) or (3), any |
| |
transaction forming part of the exchange is not itself a transfer for the purposes |
| 25 |
| |
(8) | In this section “strip” has the meaning given by section 444 of ITTOIA 2005. |
| |
(9) | For the meaning of “gilt-edged security”, see section 1024. |
| |
649 | New securities issued with extra return |
| |
(1) | This section applies if— |
| 30 |
(a) | securities (“old securities”) of a particular kind are issued by way of an |
| |
original issue of securities of that kind, |
| |
(b) | on a later occasion securities (“new securities”) of the same kind are |
| |
| |
(c) | a sum (“the extra return”) is payable in respect of the new securities by |
| 35 |
the issuer of them to reflect the fact that interest is accruing on the old |
| |
| |
(d) | the issue price of the new securities includes an element (whether or not |
| |
separately identified) representing payment for the extra return, and |
| |
(e) | the extra return is equal to the amount of interest mentioned in |
| 40 |
| |
|
| |
|
| |
|
(2) | The amount of interest referred to in subsection (1)(e) is— |
| |
(a) | the amount of interest payable for the relevant period on so many old |
| |
securities as there are new, or |
| |
(b) | if there are more new securities than old, the amount of interest which |
| |
would be so payable if there were as many old securities as new. |
| 5 |
(3) | This section does not apply if the new securities are variable rate securities. |
| |
(4) | The new securities are treated as transferred with accrued interest to the person |
| |
to whom they are issued on the new issue day. |
| |
(5) | But no one is treated as the transferor. |
| |
(6) | For the purposes of this Chapter, the settlement day for the transfer is taken to |
| 10 |
| |
(7) | See section 662 for the amount of the payment treated as made in the case of |
| |
| |
| |
“the relevant period” is the period beginning with the day after— |
| 15 |
(a) | the only or last interest payment day before the new issue day, |
| |
| |
(b) | if there is no interest payment day before the new issue day, the |
| |
day on which the old securities are issued, |
| |
and ending with the new issue day, and |
| 20 |
“the new issue day” is the day on which the new securities are issued. |
| |
650 | Trading stock appropriations etc |
| |
(1) | Subsection (2) applies if a person— |
| |
(a) | acquires securities otherwise than as trading stock of a trade the person |
| |
| 25 |
(b) | appropriates the securities as trading stock for the purposes of such a |
| |
trade (whether on the start of the trade or otherwise). |
| |
(2) | The person is treated for the purposes of this Chapter as transferring the |
| |
securities otherwise than in the course of the trade, and re-acquiring them in |
| |
the course of the trade, on the day of appropriation. |
| 30 |
(3) | Subsection (4) applies if securities— |
| |
(a) | form part of the trading stock of a person’s trade, and |
| |
(b) | are appropriated by the person for any other purpose. |
| |
(4) | The person is treated for the purposes of this Chapter as transferring the |
| |
securities in the course of the trade, and re-acquiring them otherwise than in |
| 35 |
the course of the trade, on the day of appropriation. |
| |
(5) | Subsection (6) applies if securities— |
| |
(a) | form part of the trading stock of a person’s trade, and |
| |
(b) | are retained by the person on ceasing to carry on the trade. |
| |
(6) | The person is treated for the purposes of this Chapter as transferring the |
| 40 |
securities in the course of the trade, and re-acquiring them otherwise than in |
| |
the course of the trade, on the day of cessation. |
| |
|
| |
|
| |
|
(7) | See sections 623(2) to (4) and 624(2) to (4) for cases where securities are treated |
| |
as transferred with or without accrued interest where this section applies. |
| |
651 | Owner becoming entitled to securities as trustee |
| |
(1) | This section applies if a person entitled to securities otherwise than as trustee |
| |
| 5 |
(2) | The person is treated for the purposes of this Chapter as transferring the |
| |
securities at the time the person becomes trustee of them. |
| |
(3) | The transfer is treated as being made— |
| |
(a) | by the person in a capacity other than trustee, and |
| |
(b) | to the person and, if there are any other trustees, to the others in the |
| 10 |
| |
(4) | See sections 623(2) to (4) and 624(2) to (4) for cases where securities are treated |
| |
as transferred with or without accrued interest where this section applies. |
| |
652 | Securities ceasing to be held on charitable trusts |
| |
(1) | This section applies if securities held on charitable trusts cease to be subject to |
| 15 |
| |
(2) | The trustees are treated for the purposes of this Chapter as transferring the |
| |
securities at the time when the securities cease to be so subject. |
| |
(3) | The transfer is treated as being made by the trustees in their capacity as |
| |
charitable trustees to themselves in another capacity. |
| 20 |
(4) | See sections 623(2) to (4) and 624(2) to (4) for cases where securities are treated |
| |
as transferred with or without accrued interest where this section applies. |
| |
| |
| |
This Chapter does not apply to transfers of securities in circumstances such |
| 25 |
that any disposal and acquisition are disregarded for the purposes of capital |
| |
gains tax as a result of section 263B(2) of TCGA 1992 (capital gains tax |
| |
exemption for disposals in pursuance of stock lending arrangements). |
| |
654 | Sale and repurchase arrangements |
| |
(1) | This section applies for the purposes of sections 655 to 658. |
| 30 |
(2) | There is a sale and repurchase arrangement in respect of securities if the |
| |
securities are transferred under an agreement to sell them and— |
| |
(a) | the transferor (“T”) or a person connected with T is required to buy |
| |
back the securities by the agreement or a related agreement, |
| |
(b) | T or a person connected with T is required to buy back the securities as |
| 35 |
a result of the exercise of an option acquired under the agreement or a |
| |
| |
|
| |
|
| |
|
(c) | T or a person connected with T exercises an option to buy back the |
| |
securities which was acquired under the agreement or a related |
| |
| |
(3) | Agreements are related for the purposes of this section if they are entered into |
| |
in pursuance of the same arrangement (regardless of the date on which either |
| 5 |
agreement is entered into). |
| |
(4) | References in this section to buying back securities include— |
| |
(a) | buying similar securities, and |
| |
(b) | in the case of a person connected with T, buying the securities sold by |
| |
| 10 |
(5) | Subsection (4) applies even if the person buying the securities has not held |
| |
| |
(6) | References in sections 656 and 657 to repurchase are to be read accordingly. |
| |
(7) | Securities are similar for the purposes of subsection (4) if they give their |
| |
| 15 |
(a) | the same rights against the same persons as to capital and interest, and |
| |
(b) | the same remedies to enforce those rights. |
| |
(8) | Subsection (7) applies even if there is a difference in— |
| |
(a) | the total nominal amounts of the securities, |
| |
(b) | the form in which they are held, or |
| 20 |
(c) | the manner in which they can be transferred. |
| |
655 | Transfers under sale and repurchase arrangements |
| |
(1) | If there is a sale and repurchase arrangement in respect of securities, this |
| |
Chapter does not apply to the transfer by T or the transfer back under the |
| |
| 25 |
(2) | But subsection (1) does not apply if section 608 prevents section 607 (treatment |
| |
of price differences under repos) from applying in relation to the arrangement. |
| |
656 | Power to modify: non-standard sale and repurchase arrangements |
| |
(1) | The Treasury may by regulations provide for section 655 to apply with |
| |
modifications in relation to cases involving non-standard sale and repurchase |
| 30 |
| |
(2) | A case involves a non-standard sale and repurchase arrangement if— |
| |
(a) | there is a sale and repurchase arrangement in respect of securities, |
| |
(b) | T makes a sale of the securities under the agreement to sell them (“the |
| |
| 35 |
(c) | the securities are UK shares, UK securities or overseas securities, and |
| |
(d) | any of conditions A to E is met in relation to the sale and repurchase |
| |
| |
| |
(a) | the obligation to buy back the securities is not performed, or |
| 40 |
(b) | the option to buy them back is not exercised. |
| |
|
| |
|
| |
|
(4) | Condition B is that provision is made by or under an agreement for different or |
| |
additional UK shares, UK securities or overseas securities to be treated as (or |
| |
as included with) representative securities. |
| |
(5) | Condition C is that provision is made by or under an agreement for any UK |
| |
shares, UK securities or overseas securities to be treated as not included with |
| 5 |
representative securities. |
| |
(6) | Condition D is that provision is made by or under an agreement for the sale |
| |
price or repurchase price to be decided or varied wholly or partly by reference |
| |
to post-agreement fluctuations. |
| |
(7) | Condition E is that provision is made by or under an agreement for a person to |
| 10 |
be required, in a case where there are post-agreement fluctuations, to make a |
| |
| |
(a) | beginning immediately after the making of the agreement for the |
| |
| |
(b) | ending when the repurchase price becomes due. |
| 15 |
(8) | “Post-agreement fluctuations” are fluctuations in the value of — |
| |
(a) | securities transferred in pursuance of the original sale, or |
| |
(b) | representative securities, |
| |
| which occur in the period after the making of the agreement for the original |
| |
| 20 |
(9) | “Representative securities” are UK shares, UK securities or overseas securities |
| |
which, for the purposes of the repurchase, are to represent securities |
| |
transferred in pursuance of the original sale. |
| |
657 | Power to modify: redemption arrangements |
| |
(1) | The Treasury may by regulations provide for section 655 to apply with |
| 25 |
modifications in relation to cases involving redemption arrangements. |
| |
(2) | A case involves redemption arrangements if— |
| |
(a) | arrangements, corresponding to those made in cases where there is a |
| |
sale and repurchase arrangement in respect of securities, are made by |
| |
an agreement, or one or more related agreements, in relation to |
| 30 |
securities that are to be redeemed in the period after their sale, |
| |
(b) | the securities are UK shares, UK securities or overseas securities, and |
| |
(c) | the arrangements are such that the seller or a person connected with the |
| |
seller (instead of being required to repurchase the securities or |
| |
acquiring an option to do so) is granted rights in respect of the benefits |
| 35 |
that will result from the redemption. |
| |
658 | Powers to modify: supplementary |
| |
(1) | Regulations under section 656 or 657 may make different provision for |
| |
| |
(2) | Regulations under either section may contain incidental, supplemental, |
| 40 |
consequential and transitional provision and savings. |
| |
(3) | In this section and sections 656 and 657 “modifications” includes exceptions |
| |
| |
|
| |
|
| |
|
(4) | Accordingly, a power in sections 656 and 657 to provide for a provision to |
| |
apply with modifications in relation to a particular case includes power to |
| |
provide for the provision not to apply in relation to that case. |
| |
(5) | In sections 656 and 657 “UK shares”, “UK securities” and “overseas securities” |
| |
have the same meaning as in Part 11 (see sections 566 and 567). |
| 5 |
Special rules about some calculations |
| |
659 | Transfers with or without accrued interest: interest in default |
| |
(1) | This section applies if— |
| |
(a) | the amount of the payments treated as made on a transfer of securities |
| |
is to be determined under section 632(4) or (5), 633(5) or 662(4) (cases |
| 10 |
where interest is not accounted for separately), |
| |
(b) | there has been a failure to pay interest due on the securities, and |
| |
(c) | as a result of the failure, on the interest payment day which is or follows |
| |
the settlement day the value of the right to receive the interest payable |
| |
on the securities is less than the interest payable. |
| 15 |
(2) | The calculation under section 632(4) or (5), 633(5) or 662(4) is to be made by |
| |
reference to that value instead of the interest. |
| |
660 | Transfers with unrealised interest: interest in default |
| |
(1) | This section applies if— |
| |
(a) | securities are transferred with unrealised interest, |
| 20 |
(b) | there has been a failure to pay interest due on the securities transferred, |
| |
| |
(c) | as a result of the failure, on the day of the transfer the value of the right |
| |
to receive the unrealised interest (“the unrealised interest value”) is less |
| |
than the unrealised interest. |
| 25 |
(2) | The amount of the payment treated as made to the transferor under section |
| |
634(2) is taken to be the unrealised interest value instead of the amount of the |
| |
| |
(3) | The amount of accrued income profits under section 631(1) is taken to be the |
| |
unrealised interest value instead of the amount of the unrealised interest. |
| 30 |
(4) | Subsections (2) and (3) are subject to section 661 (successive transfers with |
| |
unrealised interest in default). |
| |
(5) | For the purposes of this section and section 661, a person is treated as |
| |
transferring securities of a particular kind which the person acquired later |
| |
before securities of that kind acquired earlier. |
| 35 |
(6) | See also section 681 (exemption for unrealised interest received by transferee |
| |
| |
661 | Successive transfers with unrealised interest in default |
| |
(1) | The amount taken as the unrealised interest value for the purposes of section |
| |
660(2) or (3) is reduced if the person (“T”) who makes the transfer referred to |
| 40 |
|
| |
|