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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Qualifying corporate bonds: relevant discounted securities: CG: income

The new debt may or may not amount to a QCB on normal TCGA principles, see CG53440+. Ifthe new debt is a QCB, the acquisition cost of the new debt will have no practical capitalgains consequences. If the new debt is not a QCB, it will be necessary to establish itsbase cost for capital gains purposes.

TCGA92/S116 prevents the operation of TCGA92/S132 and TCGA92/S127 where there is aconversion of a QCB into a debt which is not a QCB, see CG53822. In this case, the newdebt is treated as having been acquired, at the date of the conversion, for aconsideration equal to the market value of the old asset (the relevant discountedsecurity) immediately before the conversion, TCGA92/S116 (6).