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HMRC internal manual

Corporate Finance Manual

Deemed loan relationships: alternative finance: investment bond arrangements: conditions: listing on a recognised stock exchange

‘Listed security on a recognised stock exchange’

CTA09/S507(1)(h) provides that the alternative finance investment bond must be listed on a recognised stock exchange, as defined in ITA07/S1005. Many sukuk issues are listed on exchanges that are recognised for all Taxes Acts purposes. Some, however, may be listed on exchanges which have never applied to HMRC for general recognition. Thus ITA07/S1005(2A) allows the Board of HMRC to make an Order designating particular stock exchanges for the purposes of the alternative finance rules only. This enables such sukuk, where they are held by UK residents, to obtain the tax treatment prescribed by the alternative finance legislation.

A list of the exchanges designated for the purposes of the alternative finance rules can be found on the HMRC web-site page that lists recognised stock exchanges under ITA07/S1005.