2.Subsection (1) provides that these changes will be made to the Corporation Tax Act (CTA) 2010.
3.Subsection (2) amends section 162(2)(c) of CTA 2010. Section 162(2) contains condition A which must be met in order for the loan to be a normal commercial loan. The amendment provides that condition A is satisfied if the loan carries a right to conversion into shares or securities in a quoted unconnected company (this is defined in subsection (4) of this section).
4.Subsection (3) amends of section 164(2)(c) so that condition A in section 162(2) is also satisfied where the loan carries a right to conversion into securities that themselves carry a right to conversion into shares or securities in a quoted unconnected company.
5.Subsection (4) inserts a new subsection into section 162(2).  New section 162(2A) provides that for the purposes of sections 162 and 164 a company is a quoted unconnected company where it is not connected to the company in which the relevant loan is held and its ordinary shares are listed on a recognised stock exchange.
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