The First-tier Tribunal has held that euro redenomination clauses do not have the effect of depriving bonds of QCB status, exempt from CGT. HMRC argued that such clauses excluded the bonds from QCB status, as provisions for conversion into a currency other than sterling, under TCGA 1992 s 117(1)(b). However, the tribunal, having regard to the purpose of the legislation, determined that in substance the clauses comprised provisions for redemption in a currency other than sterling but at the rate of exchange prevailing at redemption, falling to be disregarded under s 117(2)(b). It remains to be seen whether HMRC will appeal.
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