Trigg: QCBs and the limits of purposive interpretation

Redenomination clauses in sterling denominated securities which only take effect upon the UK adopting the euro did not prevent the securities from being qualifying corporate bonds (QCB). Disposals of existing securities which have been carefully drafted on these lines should therefore be eligible for CGT exemption. Practitioners drafting currency redemption provisions should be careful to ensure that they achieve their clients’ goals (such as non-QCB status and capital gain rollover) and should not necessarily rely on old drafting blindly without checking that it is effective to this extent. In reaching its conclusions, the Court of Appeal in Trigg appeared reluctant to adopt a purposive interpretation argued for by the taxpayer, but nevertheless found for the taxpayer for other reasons.