The calculation under section 632(4) or (5), 633(5) or 662(4) is to be made by reference to that value instead of the interest.

The amount of the payment treated as made to the transferor under section 634(2) is taken to be the unrealised interest value instead of the amount of the unrealised interest.

The amount of accrued income profits under section 631(1) is taken to be the unrealised interest value instead of the amount of the unrealised interest.

Subsections (2) and (3) are subject to section 661 (successive transfers with unrealised interest in default).

For the purposes of this section and section 661, a person is treated as transferring securities of a particular kind which the person acquired later before securities of that kind acquired earlier.

See also section 681 (exemption for unrealised interest received by transferee after transfer).

The amount taken as the unrealised interest value for the purposes of section 660(2) or (3) is reduced if the person (“T”) who makes the transfer referred to in section 660(1) also acquired the securities with the right to receive unrealised interest.

The amount of the reduction depends on whether subsection (3) applies.

If subsection (3) applies, the reduction is equal to the value on the day of the transfer to T of the right to receive the unrealised interest (“the earlier value”) less the total so received.

If subsection (3) does not apply, the reduction is equal to the earlier value.

But if the reduction under subsection (4) or (5) exceeds the amount mentioned in subsection (1), that amount is treated as reduced to nil.

In the case of a transfer treated as made under section 649 (new securities issued with extra return), the amount of the payment treated as made under section 632(1) (payment on transfer with accrued interest) is not determined under section 632(2) to (5).

If the person does account for them separately, the amount of the payment is the amount of the extra return separately accounted for.

If the person does not account for them separately, the amount of the payment is an amount equal to—

$I\times \frac{A}{B}$

where—

I is the interest payable on the new securities on the first interest payment day after the new issue day (“the payment day”),

A is the number of days in the relevant period, and

B is the number of days in the period beginning with the first day of the relevant period and ending with the payment day.

Subsection (4) is subject to section 659 (transfers with or without accrued interest: interest in default).

In this section “the extra return”, “the new issue day”, “new securities” and “the relevant period” have the same meaning as in section 649.

The amount of the payment treated as made to the seller under section 633 on the transfer of the securities to the seller is reduced.

The reduction is by so much of that amount as is attributable to securities (“the matched securities”) of a nominal value equal to that of the securities subject to the seller's contract.

If there is more than one transfer of securities to the seller, those transferred to the seller earlier are treated as the matched securities before those transferred later.

In this section “the seller” and “the seller's contract” have the same meaning as in section 647.

For cases where subsection (1)(b) does not apply, see section 647(3) (under which the seller is treated as an excluded transferee).

The sterling equivalent of the amount of the payment treated as made on a transfer of securities is determined in accordance with this section if interest on the securities is payable in a currency other than sterling (“a foreign currency”).

If the payment is determined under section 632(3), 633(3) or 662(3) (transfers under an arrangement by which interest is accounted for separately), the amount of the payment depends on whether the sterling equivalent of the interest separately accounted for is shown in an agreement for transfer.

If the sterling equivalent is so shown, the amount of the payment is taken to be that sterling equivalent.

If the sterling equivalent is not so shown, the amount is taken to be the sterling equivalent on the settlement day of the interest separately accounted for.

If the amount of the payment treated as made is determined under any other provision (except section 660 (transfers with unrealised interest: interest in default)), the amount is taken to be its sterling equivalent on the settlement day.

For the purposes of this section, the sterling equivalent of an amount or value in a foreign currency is to be calculated by reference to the London closing rate of exchange for the day concerned.

This section applies if unrealised interest is payable in a currency other than sterling (“a foreign currency”).

For the purposes of section 631(1) (amount of accrued income profits where settlement day outside interest period) the amount of the unrealised interest is taken to be its sterling equivalent on the settlement day.

For the purposes of sections 660 (transfers with unrealised interest: interest in default) and 661 (successive transfers with unrealised interest in default), the value on any day of the right to receive unrealised interest is the sterling equivalent on that day of that value in the foreign currency.

For the purposes of those sections unrealised interest received in a foreign currency is taken to be the sterling equivalent on the day of receipt of the amount received.

For the purposes of this section, the sterling equivalent of an amount or value in a foreign currency is to be calculated by reference to the London closing rate of exchange for the day concerned.