Income Tax (Trading and Other Income) Act 2005 section 437

Transactions which are disposals

Section 437 defines what counts as a "disposal" of a deeply discounted security for the purposes of triggering an income tax charge or loss relief.

• A disposal includes redemption, transfer (by sale, exchange, gift or otherwise), and conversion into shares or other securities under the security's terms.
• The person treated as making the disposal depends on the type of event: the holder on redemption, the transferor on transfer, or the holder on conversion.
• A person who dies while holding a deeply discounted security is treated as having transferred it to their personal representatives immediately before death, crystallising any gain or loss at that point.
• Additional disposal rules apply for strips of government securities, interest-bearing corporate securities, and corporate strips under separate provisions.