Related Commentary  Related HMRC Manuals

59(1)  No deduction is allowed under section 58 in respect of a loan or loan stock if–

(a)it carries the right of conversion into, or to the acquisition of, shares or other securities, and

(b)the right is exercisable before the end of the period of 3 years from the date when the loan was obtained or the stock issued (“the 3 year period” ).

59(2)  “Other securities”  does not include a loan or loan stock–

(a)the interest on which is deductible in calculating the profits of the person's trade, and

(b)which does not carry such a right as is mentioned in subsection (1).

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