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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Conversion of securities: change in status of debt S88 FA 1997

FA97/S88, TCGA92/S132 (3)(a)(ia), TCGA92/S132 (3)(a)(ib)

The scope of TCGA92/S132 (3)(a) was broadened by FA97/S88 to cover

  • a conversion of a security which is not a QCB into a security (of the same company) which is a QCB; and
  • a conversion of a QCB into a security (of the same company) which is not a QCB.

The rules operate both in circumstances where the terms of a debt were subject to amendment, and in circumstances where the change in tax status came about as a result of the way the terms of the debt operated, see the examples at CG55020. The opening words of TCGA92/S132 (3)(a) were amended to ensure that these latter cases were within the scope of the Section, as broadened.