Corporation Tax Act 2009 section 403

Meaning of "strip"

Section 403 defines what a "strip" means in relation to a gilt-edged security for the purposes of the special rules on gilt strips.

• A strip is a security issued under the National Loans Act 1968 that represents the right to one or more specific interest or principal payments from an underlying gilt-edged security.
• The strip must be issued alongside other securities so that, taken together, they collectively cover every remaining payment due under the original gilt.
• A strip cannot itself represent a proportionate share of every remaining payment under the gilt — it must relate to specific individual payments rather than a fraction of all of them.
• Once a dividend on the underlying gilt has been finalised (the balance struck), the related payment is no longer treated as a remaining payment for the purposes of this definition.