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Conversion clause
KEY POINTS
- Partnership bought undervalued bonds sold them
and claimed exemption from capital gains tax under TCGA 1992 s 115. - Effect of foreign currency conversion on qualifying corporate bonds.
- Court of Appeal said the bonds did not contain provisions for their conversion as in TCGA 1992 s 117(1)(b).
- Case concerned only euro-conversion clauses in bonds.
Nicholas Trigg was a member of Tonnant LLP a partnership that bought some undervalued bonds and later sold them at a profit. He argued that these were qualifying corporate bonds (QCBs) and therefore exempt from capital gains tax (TCGA 1992 s 115). HMRC said the bonds were not QCBs (non-QCBs) so capital gains tax was due. The bonds concerned each had one of two schedules that were intended to activate if...
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