(1)This section applies to the issue of funding bonds to a creditor in respect of a liability to pay interest on a debt incurred by a body corporate, a government, a public institution or other public authority.
(2)The issue is treated for the purposes of the Corporation Tax Acts as if it were the payment of so much of that interest as equals the market value of the bonds at their issue.
(3)In this section “funding bonds” includes any bonds, stocks, shares, securities or certificates of indebtedness.
(1)The redemption of funding bonds is not treated as the payment of interest on a debt for the purposes of the Corporation Tax Acts if their issue was treated as the payment of interest on the debt under—
(a)section 413, or
(b)section 380 of ITTOIA 2005 (which makes provision corresponding to section 413 for income tax purposes).
(2)In this section “funding bonds” includes any bonds, stocks, shares, securities or certificates of indebtedness.