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Home / Simons-Taxes /Corporate tax /Part D1 Corporation tax generally /Division D1.7 Loan relationships /Loan relationships—anti-avoidance provisions / D1.789 Loan relationships—reset bonds
Commentary

D1.789 Loan relationships—reset bonds

Corporate tax

The provisions in this article ceased to apply where the conditions for it to first apply were satisfied on or after 18 November 2015.

Background to reset bonds

A reset bond is a creditor relationship which is issued on commercial terms but contains a clause which varies those terms at a stated date (usually shortly after issue) depending on a pre-set trigger event (eg the value of a financial index). As a result, the bond is suddenly worth much more or much less than its value on issue. Such bonds have been used to obtain a tax advantage in two ways:

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    •ÌýÌýÌýÌý two reset bonds are issued with interest at a commercial rate; at a given time,

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