A4.423 Funding bonds

A4.423 Funding bonds

Funding bonds may be issued in satisfaction of a liability to pay interest on money borrowed by any government, public authority or public institution or by any body corporate1. Such an issue is treated as if it was a payment of an amount of interest equal to the value of the bonds at the time of their issue; the redemption of the bonds is not treated as the payment of any amount of that interest2.

Where a person by or through whom the bonds are issued is required to deduct tax from the payment if it were an

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