Section 403 — Corporation Tax Act 2009: Meaning of “strip”

Meaning of “strip” 403 1 In sections 401 and 402 “ strip ”, in relation to a gilt-edged security, means a security issued under the National Loans Act 1968 (c. 13) which meets conditions A, B and C.

2 Condition A is that the security is issued for the purpose of representing the right to or of securing—

a a payment corresponding to a payment of interest or principal remaining to be made under the gilt-edged security, or b two or more payments each corresponding to a payment to be so made.

3 Condition B is that the security is issued in conjunction with the issue of one or more other securities which, together with that security—

a represent the right to, or b secure, payments corresponding to every payment remaining to be made under the gilt-edged security.

4 Condition C is that the security is not itself a security that—

a represents the right to, or b secures, payments corresponding to a part of every payment remaining to be made under the gilt-edged security.

5 After the balance has been struck for a dividend on a gilt-edged security, a payment to be made in respect of that dividend is treated for the purposes of conditions A, B and C as not being a payment remaining to be made under that security.