Part 5

Loan Relationships
Chapter 12

Special rules for particular kinds of securities

Deeply discounted securities: connected companies and close companies

Introduction
406
1
The following sections deal with deeply discounted securities—
a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
sections 409 to 411 (deeply discounted securities of close companies), and
c
section 412 (persons indirectly standing in the position of creditor).
2
In this section and sections 409 to 412 “deeply discounted security” has the same meaning as in Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) (see section 430 of that Act).
3
In sections 409 to 412 “the discount” means the difference between—
a
the issue price of the security, and
b
the amount payable on redemption.
4
The provisions of Chapter 8 of Part 4 of ITTOIA 2005 apply for the purposes of this section and sections 409 to 412 for determining the difference between the issue price of a security and the amount payable on redemption as they apply for the purposes of section 430 of that Act.
S. 406(1)(a) omitted (with effect in accordance with s. 25(6)-(14) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 25(5)(a)
Pt. 5 modified (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/3209), regs. 1(1), 11(3)-(6)
Pt. 5 applied (with modifications) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 990(5), 1184(1) (with Sch. 2)
Word in s. 406(2) substituted (with effect in accordance with s. 25(6)-(14) of the amending Act) by Finance Act 2015 (c. 11), s. 25(5)(b)
Pt. 5 modified by 2010 c. 4, s. 356NB(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
Pt. 5 modified by 2007 c. 3, s. 809FZZ(9) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))
Pt. 5 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)
Pt. 5 modified by 2010 c. 4, s. 356NC(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)
Word in s. 406(4) substituted (with effect in accordance with s. 25(6)-(14) of the amending Act) by Finance Act 2015 (c. 11), s. 25(5)(b)
Pt. 5 modified (30.9.2013) by The BRB (Residuary) Limited (Tax Consequences) Order 2013 (S.I. 2013/2242), arts. 1, 7
Pt. 5 modified by 2010 c. 4, s. 676AG(1) (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 75)
Pt. 5 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 2; S.I. 2011/2576, art. 5
Ss. 406-412 excluded by S.I. 2006/3296, reg. 19(3) (as substituted (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Taxation of Securitisation Companies (Amendment) Regulations 2018 (S.I. 2018/143), regs. 1(1), 10(3))
Pt. 5 applied (with effect in accordance with Sch. 24 paras. 13-16 of the amending Act) by Finance Act 2009 (c. 10), Sch. 24 para. 15(2)(3)
Word in s. 406(3) substituted (with effect in accordance with s. 25(6)-(14) of the amending Act) by Finance Act 2015 (c. 11), s. 25(5)(b)
Pt. 5 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 5; S.I. 2012/628, art. 3(b)