HC Deb 27 April 1937 vol 323 c177

8. "That—

(1) where the owner of any securities agrees to sell or transfer the securities and by the same or any collateral agreement agrees, or acquires an option which he subsequently exercises, to buy back or reacquire the securities or to buy or acquire similar securities, any interest which, as the result of the transaction, is receivable otherwise than by the owner shall, whether it would or would not have been otherwise chargeable to tax, be deemed for all the purposes of the Income Tax Acts to be the income of the owner and not to be the income of any other person, and, if payable without deduction of tax, shall be chargeable to tax at the standard rate under Case VI of Schedule D;

(2) where a person carrying on a trade which consists wholly or partly in dealing in securities agrees to buy or acquire securities and—

  1. (a) by the same or any collateral agreement agrees, or acquiries an option which he subsequently exercises, to sell back or retransfer the securities or to sell or transfer similar securities; and
  2. (b) as the result of the transaction receives any interest which becomes payable in respect of the securities;
no account shall be taken of the transaction in computing for any of the purposes of the Income Tax Acts the profits arising from or loss sustained in the trade;

(3) for the purpose of this Resolution—

  1. (i) the expression interest includes a dividend;
  2. (ii) the expression 'securities ' includes stocks and shares;
  3. (iii) securities shall be deemed to be similar if they entitled their holders to the same rights against the same persons as to capital and interest, and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred."