Pre-Budget Report – Gilt-Edged Securities
Legislation is being introduced relevant to some companies that hold index-linked gilt-edged securities.
The new legislation will ensure that companies and groups that undertake transactions involving index-linked gilt-edged securities cannot benefit from the uplift to carrying value, to the extent that there are arrangements that have resulted in the company or group not being economically exposed to the inflationary aspect of holding the index-linked gilt-edged security.
For example, by entering into a total return swap over the income from, and changes in value of, the index-linked gilt-edged security.
The new rules will have effect in respect of index-linked gilt-edged securities held by companies on or after 9 December 2009.