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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Conversion of securities: definition of conversion

TCGA92/S132 (3)(a) originally gave three specific examples of conversions.

  • A conversion of securities of a company into shares in the company. TCGA92/S132 (3)(a)(i);
  • A conversion into other securities at the option of the holder as an alternative to redeeming the securities for cash. TCGA92/S132 (3)(a)(ii);
  • The issue of government stock in exchange for shares in companies which are nationalised but see CG55045 if the compulsory acquisition occurred after 6 April 1976.

These examples are not an exhaustive definition of conversion. A conversion of securities into other securities in the same company which did not fall within TCGA92/S132 (3)(a)(ii) should also be treated as a conversion.

In addition, the range of cases covered by the Section was broadened by legislation in FA97. See CG55018+.