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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Other debts deemed to be securities: debts acquired on share exchanges

TCGA92/S251 (6)

A debenture is simply an acknowledgement of a debt. Most debentures will be securities within TCGA92/S132 (3)(b) on the principles in CG53420+.

Exceptionally, it may not be clear that a debenture would amount to a security on normal principles. To ensure that any gain or loss on the earlier asset is brought into charge on any subsequent disposal of the debt, TCGA92/S251 (6) deems any debenture issued on or after 16 March 1993 whose issue falls within TCGA92/S126(1), TCGA92/S135 or TCGA92/S136 to be a security within TCGA92/S132.

Such a debenture may also be a qualifying corporate bond if all the other relevant conditions of TCGA92/S117 are satisfied, see CG53741.

TCGA92/S251 (6) was extended by FA97/S88 (5) to deem as securities any debentures resulting from a conversion of securities within TCGA92/S132, or issued in pursuance of rights attaching to such debentures. This extension was part of new rules to counter suggestions that capital gains liabilities might be reduced or eliminated on disposals of debts because of an earlier change in the tax status of the debts.

See CG55018+.