Income Tax Act 2007

638 Excluded persons: disregard of certain payments and transfers

(1) This section applies if there is a transfer of securities in relation to which a person (“P”) is an excluded transferor or excluded transferee.

(2) In determining whether P has made accrued income profits or accrued income losses under section 628 (making accrued income profits and losses: general rule) and the amount of any such profits or losses, no account is to be taken of any payment treated as made by or to P on the transfer.

(3) In determining whether P has made accrued income profits under section 630 (making accrued income profits: settlement day outside interest period) and the amount of any such profits, no account is to be taken of the transfer if P is an excluded transferor in relation to it.

(4) For the cases where a person is an excluded transferor or excluded transferee in relation to a transfer, see—

• section 639 (small holdings: individuals),

• section 640 (small holdings: personal representatives),

• section 641 (small holdings: trustees of a disabled person’s trusts),

• section 642 (traders),

• section 643 (non-residents),

• section 644 (individuals to whom the remittance basis applies),

• section 645 (charitable trusts etc),

• section 646 (pension scheme trustees), and

• section 647 (makers of manufactured payments).

(5) Whether a person is an excluded transferee is also relevant to the application of section 681 (exemption for unrealised interest received by transferee after transfer).