The following Tax guidance note provides comprehensive and up to date legal information covering:
When a UK resident company decides to issue a bond in order to raise debt finance, it should, among the many other commercial and legal issues that arise, consider the tax consequences for it of choosing the bond route, from issuing the bond in the first place, the ongoing servicing of the bond and redeeming (ie repaying) the bond at the end of its life. The main issues that will arise, and which are summarised in this note relate to:
stamp taxes, and
A bond issuer will also need to consider the impact of certain international developments such as Foreign Account Tax Compliance Act (FATCA) and the potential implementation of the EU financial transactions tax (FTT) (for which, see: FATCA and FTT below).
The taxation of bondholders will also be important for the issuer because:
it will affect the marketability of the bond, and
the issuer will need to deal effectively with the taxation of bondholders in the bond documentation
These issues are explained in Practice Note: Tax issues for bondholders.
If the issuer is a UK resident company, it will (almost always) be treated as having a loan relationship because the issuer will be a debtor (ie borrower) as respects a money debt that arises from a transaction for the lending of money. For
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