deeply discounted securities
Securities where the amount payable on redemption (A) exceeds (or may exceed) the issue price by more than A x 0.5% x Y, where Y is the lower of 30 and the number of years between issue and redemption (section 430, Income Tax (Trading and Other Income) Act 2005). The effect is that securities issued at a percentage discount greater than 0.5% of the term of the securities will, in principle, be deeply discounted securities. Certain instruments are excluded from the definition, such as shares, gilts that are not stripped, excluded indexed securities, life assurance policies and capital redemption policies.
Deeply discounted securities were formerly known as relevant discounted securities (Schedule 13, paragraph 3(1), Finance Act 1996).
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Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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