CG54600 - Deep discount securities: introduction
ICTA88/S57 and ICTA88/SCH4 introduced new rules for dealing with the Income Tax treatment of securities issued at a deep discount by companies after 13 March 1984. A similar charge will arise on the disposal, on or after 14 March 1989, of securities issued by public bodies. The investor is treated as having received an amount of accrued income which is taxable under Case III or Case IV when the security matures or is disposed of. For CapitalGains Tax purposes the computation on the disposal or maturity is adjusted to exclude the amount of the accrued income, TCGA92/S118.
The deep discount regime was replaced by a new taxation regime for debts in FA96.ICTA88/S57 and ICTA88/SCH4 were repealed with effect from 1 April 1996 for Corporation Taxpurposes, see CG54000+, and from 6 April 1996 for Income Tax purposes, see CG54200+. The advice in CG54601+ will not apply from these dates.