Taxes Consolidation Act 1997 section 55

Taxation of strips of securities

Section 55 sets out the tax rules for strips of securities, covering how strips are created, acquired, reconstituted, and valued on an annual basis for tax purposes.

• Creating strips from a security is treated as a disposal of the original security at market value, with each strip acquired at a proportion of the security's opening value and taxed as a non-interest-bearing security under Case III of Schedule D.
• Where a non-dealer acquires an already-created strip of an Irish Government security, the acquisition cost is the lesser of the price paid and a proportion of the nominal value of the security.
• Reconstituting strips back into the original security is treated as a disposal of each strip at market value and an acquisition of the security at the combined market value of the strips.
• Strips are deemed to be disposed of and reacquired at market value on 31 December each year (or at the end of an accounting period for companies), with losses from these deemed disposals available to offset against gains from similar deemed disposals.