Taxation of Chargeable Gains Act 1992 section 151T

Investment bond arrangements are qualifying corporate bonds

Section 151T sets out the conditions under which investment bond arrangements (a type of alternative finance arrangement) are treated as qualifying corporate bonds, meaning that any gains on disposal are exempt from capital gains tax.

• Investment bond arrangements are treated as qualifying corporate bonds if four conditions (A to D) are all met, with the arrangements deemed to be a corporate bond issued on the date they are entered into.
• The capital must be expressed in sterling (Condition A) and the redemption payment must not be payable in a currency other than sterling (Condition B).
• The entitlement to the redemption payment must not be convertible, whether directly or indirectly, into an entitlement to securities — unless those securities are themselves investment bond arrangements (Condition C).
• The additional payments (the return element of the arrangement) must not be determined wholly or partly by reference to the value of the underlying bond assets (Condition D).