IPTM7800 | Personal portfolio bonds (PPB): policies made before 17 March 1998: selection of shares and securities listed on a recognised stock exchange

Meaning of ‘securities’

The term ‘securities’ includes fixed interest and other securities, so long as they are listed on a recognised stock exchange. UK gilts and quoted Eurobonds, for instance, are both categories of securities the policyholder may be entitled to select without the policy being a PPB.

Shares and securities listed on a recognised stock exchange

It is not sufficient for a share or security to be dealt in on a recognised stock exchange. It must be ‘listed’ on a recognised stock exchange or the policyholder’s entitlement under the policy to select the share or security will make the policy a PPB regardless of when the policy was taken out. The phrase ‘listed on a recognised stock exchange’ in respect of shares and securities is defined at ITA07/S1005(3). This means shares and securities which:

• are admitted to trading on that exchange, and

• are included in the official UK list maintained by the Financial Conduct Authority (in its capacity as the UK Listing Authority) or are officially listed in a qualifying country outside the UK in accordance with provisions corresponding to those generally applicable in EEA states.

The definition of a recognised stock exchange is at ITA07/S1005(1). A full list of recognised stock exchanges is given on the HMRC website.

De-listed shares and securities

A share or security that was listed on a recognised stock exchange when it was originally selected may subsequently cease to be listed. It is a condition of the policy not being a PPB that only ‘listed’ stocks may be selected. So if a share or security is de-listed then the link to the benefits under the policy must be broken, as soon as reasonably possible thereafter, for instance by disposing of the shares, to prevent the policy becoming a PPB.

Options, warrants and other rights to acquire shares and securities

For pre-17 March 1998 policies, the PPB legislation extends the meaning of shares and securities to include options, warrants or other rights to acquire shares and securities. This extension does not apply for policies taken out on or after 17 March 1998