Part 12Accrued income profits

Chapter 2Accrued income profits and losses

The payments treated as made on transfers

634Payment on transfer with unrealised interest

1

In the case of a transfer of securities with unrealised interest where the settlement day falls within an interest period, for the purposes of this Chapter a payment is treated as made to the transferor in that period.

2

The amount of the payment is equal to the unrealised interest.

3

Subsection (2) is subject to section 660 (transfers with unrealised interest: interest in default).

4

No one is treated as making the payment.

5

Accordingly, the payment is not brought into account in determining whether the transferee is treated as making accrued income profits or losses under section 628.

6

But see section 681 (exemption for unrealised interest received by transferee after transfer).

7

See section 630 for the rules that apply to transfers of securities with unrealised interest where the settlement day falls outside an interest period.