CTA09/S645(7), 670

This guidance applies where a company bifurcates a loan asset under IAS 39 or FRS 26. Bifurcation is not permitted for financial assets under FRS 102 (unless IAS 39 is applied) or IFRS 9. For further details of the accounting permutations see CFM52215.

Tax treatment for holders of bifurcated convertibles

Where a security meets the conditions of CTA09/S645, there are three consequences.

Credits or debits on the embedded option are brought into account as chargeable gains or allowable losses under CTA09/S641CFM55030.

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