Taxation of Chargeable Gains Act 1992 section 151U

Treatment of bond-holder and bond-issuer

Section 151U establishes how bond-holders and bond-issuers are treated for capital gains tax purposes under investment bond arrangements, ensuring a clear separation of ownership and responsibility between the two parties.

• The bond-holder is not treated as having any legal or beneficial interest in the underlying bond assets, and cannot claim relief for capital expenditure connected with those assets.
• The bond-issuer is not treated as a trustee of the bond assets, meaning the relationship is a commercial one rather than a fiduciary one.
• Any capital gains arising in connection with the bond assets belong to the bond-issuer, not the bond-holder, and do not arise in a fiduciary or representative capacity.
• Redemption payments and additional payments made by the bond-issuer to the bond-holder are not made in a fiduciary or representative capacity.