The European Single Currency (Taxes) Regulations 1998

Payment deemed to be made by interim holder on euroconversion

16.—(1) This regulation applies in a case where—

(a) there is an arrangement for the sale and repurchase of securities to which section 730A(1) of the Taxes Act, or section 263A(1) of the 1992 Act, applies, or to which section 730A(1) of the Taxes Act would apply if the sale price and the repurchase price were different,

(b) there is a euroconversion of those securities prior to their being repurchased, and

(c) it is reasonable to assume that an amount that is representative of a capital payment in respect of the euroconversion is taken into account in computing the repurchase price of those securities.

(2) The amount referred to in paragraph (1)(c) shall be treated as if it were a separate representative payment in respect of the euroconversion made by the interim holder to the person required or entitled under the arrangement to repurchase the securities.

(3) The repurchase price of the securities shall be treated, for the purposes of section 730A of the Taxes Act and the 1992 Act, as increased by an amount equal to the amount of the separate payment treated as made by paragraph (2).