Bonds that contained a provision for currency conversion to euros were nevertheless qualifying corporate bonds for capital gains tax purposes.
The appellant treated a gain on his disposal of certain bonds as exempt from capital gains tax in his tax return for 2009/10, on the basis that they were qualifying corporate bonds (QCBs).
One of the bond clauses (‘Schedule A’) referred to the euro in its heading and dealt with a prospective change of currency in the UK. It broadly provided for conversion into the new UK currency for the purposes of obligations and payments under the bond. The other clause (‘Schedule B’) would come into effect if the UK became an EU member state which adopted the euro as its currency. It enabled the bond’s issuer to give notice that the bond be deemed to be re-denominated in euros.
HM Revenue and Customs considered that the relevant clauses
