What does 'buying back' mean for repo agreements under section 263AA of TCGA 1992?

Under section 263AA, buying back does not require repurchasing the exact same securities originally sold. It is sufficient to buy similar securities. A connected person carrying out the repurchase also counts as buying back, and the buyer need not have previously held the securities. This reflects how repo markets actually operate in practice.

When are securities considered 'similar' under section 263AA of the Taxation of Chargeable Gains Act 1992?

Securities are similar if they confer the same rights to capital, distributions, interest and dividends against the same persons, with the same remedies to enforce those rights. Differences in total nominal value, the form in which the securities are held, or the manner of transfer do not prevent securities from being treated as similar under United Kingdom law.

What are 'related agreements' under section 263AA TCGA 1992?

Agreements are treated as related if they are entered into as part of the same overall arrangement. The dates on which the individual agreements are made are irrelevant. What matters is whether they form part of a single planned transaction. This prevents avoidance through structuring repo arrangements as separate agreements entered into at different times.

How broadly is 'securities' defined under section 263AA for capital gains tax purposes?

Securities is defined very broadly to cover shares in any company regardless of residence, UK government and local authority debt, and equivalent instruments issued by overseas governments, authorities and non-UK-resident bodies. This wide scope ensures that repo transactions involving virtually any type of marketable security are caught by the capital gains tax rules.

Taxation of Chargeable Gains Act 1992 section 263AA

Section 263A: interpretation

Section 263AA provides the definitions and interpretation rules needed to apply section 263A, which deals with the capital gains tax treatment of sale and repurchase ("repo") agreements involving securities.

"Buying back" securities includes buying similar securities, not just the identical ones originally sold, and this applies even if the buyer has never previously held those securities.
Securities are "similar" if they confer the same rights to capital, distributions, interest and dividends against the same persons, with the same remedies — regardless of differences in nominal amount, form or transfer method.
Two agreements are "related" if they are entered into as part of the same overall arrangement, irrespective of timing.
"Securities" is broadly defined to cover shares in any company, UK government and local authority debt, and equivalent instruments issued by overseas governments, authorities and non-UK-resident bodies.

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