Schedule 2: Transitionals and savings etc. Part 5: Savings and investment income: general Paragraph 80: Deeply discounted securities: deemed transfers of strips on 5th April
3563.Paragraph 14(4) of Schedule 13 to FA 1996 provides that a strip of a government security is deemed to be transferred on 5 April and reacquired the following day. This is rewritten in section 445 of this Act as a disposal and reacquisition on the same day. See Change 87 in Annex 1. This change will not work as it should for the tax year beginning 6 April 2005, when this Act first has effect, because while paragraph 14(4) of Schedule 13 to FA 1996 will deem a disposal on 5 April it will have been repealed on 6 April. There will therefore be no deemed reacquisition.
3564.This provision ensures that the strip will be deemed to have been reacquired on 6 April 2005.