CG54510 - Securities: Accrued Income Scheme: conversion of securities

TCGA92/S119 (10)

A conversion of securities within TCGA92/S132 or exchange of securities within TCGA92/S135 or TCGA92/S136 will not be treated as a disposal for Capital Gains Tax purposes. For guidance on conversions see CG55004 and share exchanges CG52521 onwards. However these events can be transfers for Accrued Income Scheme purposes either under the general rules of the scheme or under the specific provisions of ITA07/S619 and ITA07/S623 and S624.

For Capital Gains Tax purposes conversions and securities are dealt with as follows. Any accrued amount received is treated as first reducing any Capital Gains Tax consideration the taxpayer receives or is deemed to receive on the conversion or exchange. Normally a straightforward conversion or exchange would not involve the receipt of any consideration. Any balance of the accrued amount is treated as consideration given at the time of the conversion or exchange. Therefore, the taxpayer will get relief for any amount which has been taxed under the Accrued Income Scheme. The ordinary rules of TCGA92/S128 apply to the payment of the consideration, see CG51820.

Any relief given for a rebate amount is treated as consideration received for Capital Gains Tax purposes at the date of the conversion or exchange. The ordinary rules of TCGA92/S128 apply to this receipt.