They are loans to the company which are repayable at or between set dates. Any profit on their sale is generally tax free.
Tax is deducted from the payment.
A loan on which the interest you pay qualifies for tax relief. Only a limited number of loans qualify for tax relief, including loans for buying shares in, or lending money to, a close company, purchasing an interest in, or lending money to, a partnership, and purchasing machinery or plant for use in your employment or partnership. All Rights Reserved.