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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Share exchange: TCGA92/S135: definition of debenture

There is no statutory definition of debenture. Therefore, it has its ordinary meaning which is acknowledgement of debt. Nearly all debentures issued in exchange for shares and debentures will be securities within the meaning of TCGA92/S132 (3)(b). See CG53420+ and CG55015 for instructions on the definition of security. If the debenture is not a security the treatment depends upon whether it was issued before or after 16 March 1993.

Debenture: issue 16/3/93+

TCGA92/S251 (6) deems any debenture issued on or after 16 March 1993 whose issue falls within TCGA92/S135 to be a security.

Debenture: issue pre-16/3/93

A debenture issued before 16 March 1993 whose issue falls within TCGA92/S135 which is not a security will not be a chargeable asset in the hands of the original creditor. Such a debenture would be exceptional.