Section 1016 | Meaning of “equity note” in section 1015

(1)For the purposes of section 1015(6) a security is an equity note if any of the tests in subsection (2) is satisfied either—

(a)as regards the whole of the principal, or

(b)as regards any part of it.

(2)These are the tests.

Test 1 The security's terms contain no particular date by which it is to be redeemed.

Test 2 Under the security's terms the date for redemption, or the latest date for redemption, falls after the end of the permitted period.

Test 3 Under the security's terms redemption is to occur after the end of the permitted period if a particular event occurs, and the event is one which (judged at the time of the security's issue) is certain or likely to occur.

Test 4 The issuing company can secure—

(a)that there is no particular date by which the security is to be redeemed, or

(b)that the date for redemption falls after the end of the permitted period.

(3)In subsection (2) “the permitted period” means the period of 50 years beginning with the date of the security's issue.