Commentary

D7.331 Conversions of securities

Corporate tax
Corporate tax | Commentary

D7.331 Conversions of securities

Corporate tax | Commentary

D7.331 Conversions of securities

In general, a conversion of one class of securities into another is a realisation of the original security, so that any profit or loss on the conversion has to be included in the tax computation1.

Investment dealing companies usually draw up their accounts in accordance with generally accepted accounting practice and any exchanges of securities are dealt with under the loan relationships legislation (see Division D1.7).

Conversion of securities held as trading stock

There are separate rules where an investment dealing company holds securities as trading stock and exchanges them for new securities on:

  1.  

    (a)     a rights or

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