Finance Act 1985

73 Deemed sums and reliefs on transfers

(1) This section applies where securities are transferred on or after 28th February 1986; and references to a period are to the interest period in which the settlement day falls.

(2) If they are transferred with accrued interest—

(a) the transferor shall be treated as entitled to a sum on them in the period of an amount equal to the accrued amount, and

(b) the transferee shall be treated as entitled to relief on them in the period of the same amount.

(3) If they are transferred without accrued interest—

(a) the transferor shall be treated as entitled to relief on them in the period of an amount equal to the rebate amount, and

(b) the transferee shall be treated as entitled to a sum on them in the period of the same amount.

(4) In subsection (2) above " the accrued amount " means—

(a) if the securities are transferred under an arrangement by virtue of which the transferee accounts to the transferor separately for the consideration for the securities and for gross interest accruing to the settlement day, an amount equal to the amount (if any) of gross interest so accounted for. and

(b) in any other case, an amount equal to the accrued proportion of the interest applicable to the securities for the period.

(5) In subsection (3) above " the rebate amount " means—

(a) if the securities are transferred under an arrangement by virtue of which the transferor accounts to the transferee for gross interest accruing from the settlement day to the next interest payment day. an amount equal to the amount (if any) of gross interest so accounted for, and

(b) in any other case, an amount equal to the rebate proportion of the interest applicable to the securities for the period.

(6) The accrued proportion is—

.

(7) The rebate proportion is—

.

(8) In this section—

• A is the number of days in the period up to (and including) the settlement day, and

• B is the number of days in the period.