Part 12Accrued income profits

Chapter 2Accrued income profits and losses

Transfers to which Chapter applies

623Transfers with accrued interest

1

The general rule is that securities are transferred with accrued interest for the purposes of this Chapter if they are transferred with the right to receive interest payable—

a

in a case where the settlement day is an interest payment day, on the settlement day, and

b

in any other case, on the first interest payment day after the settlement day.

2

But, in the case of the transfers specified in subsection (3), subsection (4) applies instead of subsection (1).

3

The transfers are those treated as made under—

a

section 620(1)(b) (conversion),

b

section 650 (trading stock appropriations etc),

c

section 651 (owner becoming entitled to securities as trustee), and

d

section 652 (securities ceasing to be held on charitable trusts).

4

If the person treated as the transferor had the right to receive interest payable as mentioned in subsection (1)(a) or (b), the securities are treated as transferred with accrued interest.

5

This section is subject to section 626 (transfers of variable rate securities).

6

See also—

  • section 648(6) (certain exchanges of strips treated as transfers with accrued interest), and

  • section 649(4) (issue of new securities with extra return treated as transfer with accrued interest).