Income Tax (Trading and Other Income) Act 2005 section 435

Securities issued in separate tranches: basic rule

Section 435 establishes the basic rule for determining whether securities issued in later tranches under the same prospectus are treated as deeply discounted securities.

• Where securities are issued on separate occasions under the same prospectus, the deeply discounted status of earlier tranches determines the treatment of later ones
• If any earlier tranche is not a deeply discounted security, later tranches under the same prospectus will also not be deeply discounted securities
• An exception applies where securities were issued to a person connected with the issuer, causing them to fail the condition in section 431(2)(b)
• A further exception applies where a connected person has acquired or become the holder of the securities, bringing section 431(5) into effect