Revenue Note for Guidance
This section provides that the rules of section 584 relating to a reorganisation or reduction of share capital also apply to the conversion of securities.
(1) “conversion of securities” includes —
“Investment undertaking” and “unit” have the same meaning respectively as in section 739B.
“security” includes any loan stock or other similar securities, whether of a government, public authority or company and whether secured or unsecured, but does not include securities which are exempt from capital gains tax under section 607.
(1A) A conversion of securities shall not, however, include a conversion of securities into units in an investment undertaking, being a company.
(2) Section 584 applies in relation to the conversion of securities in the same way as it applies to the reorganisation or reduction of a company’s share capital. Consequently, such a conversion is not treated as a disposal for capital gains tax purposes.
Relevant Date: Finance Act 2021