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In force since 2026-09-16, as the publisher states.
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Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.
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(1) For the purposes of this Chapter securities are transferred with unrealised interest if they are transferred with the right to receive interest payable on an interest payment day falling before the settlement day. (2) Such interest is referred to in this Chapter as “unrealised interest”.
Propose a change(1) Sections 623 and 624 do not apply to transfers of variable rate securities. (2) Such transfers are not treated as transfers with accrued interest or transfers without accrued interest.
Propose a change(1) For the purposes of this Chapter securities are “variable rate securities” unless their terms of issue provide that throughout the period from issue to redemption (whenever redemption might occur) they are to carry interest at a rate which falls into one, and one only, of the categories specified in subsection (2). (2) The categories are— (a) a fixed rate which is the same throughout the period, (b) a rate which bears the same fixed relationship to a standard published base rate throughout the period, and (c) a rate which bears the same fixed relationship to a published index of prices throughout the period. (3) In subsection (2) “published index of prices” means the retail prices index or any similar general index of prices which is published by the government of any territory outside the United Kingdom or by an agent of such a government. (4) In determining whether new securities (within the meaning of section 649 (new securities issued with extra return)) are variable rate securities, the interest payable on them on the first interest payment day after their issue is treated as payable in respect of the period beginning with the relevant period and ending with that day. (5) In subsection (4) “the relevant period” has the meaning given by section 649(8).
Propose a change(1) This section sets out the general rule for determining whether a person is treated as making accrued income profits or accrued income losses where securities are transferred by or to the person. (2) This section does not apply in a case where section 630 applies. (3) A separate calculation is to be made for each kind of security that is transferred by or to the person and for each interest period of each such kind of security. (4) Each such calculation is to find— (a) the total amount (“A”) of the payments treated under this Chapter as made to the person in the interest period in question in respect of transfers of securities of the particular kind, and (b) the total amount (“B”) of the payments treated under this Chapter as made by the person in that period in respect of such transfers. (5) A person is treated as making accrued income profits in an interest period as a result of transfers of securities of a particular kind if A exceeds B. (6) A person is treated as making accrued income losses in an interest period as a result of transfers of securities of a particular kind if B exceeds A. (7) For the payments that are treated as made on transfers of different kinds, see— section 632 (payment on transfer with accrued interest), section 633 (payment on transfer without accrued interest), section 634 (payment on transfer with unrealised interest), section 635 (payment on transfer of variable rate securities), and section 637(2) (accrued income losses treated as payment on transfer in next interest period). (8) See also— section 638(2) (no account to be taken of any payment treated as made by or to excluded transferor or transferee), and Chapter 3 (exemptions relating to interest on securities).
Propose a change(1) If section 628(5) applies, the amount of the accrued income profits treated as made is equal to the excess mentioned in section 628(5). (2) If section 628(6) applies, the amount of the accrued income losses treated as made is equal to the excess mentioned in section 628(6).
Propose a change(1) This section applies if— (a) there is a transfer of securities with unrealised interest or a transfer of variable rate securities, and (b) the settlement day for the transfer falls after the end of the only or last interest period of the securities. (2) The transferor is treated as making accrued income profits. (3) See also— section 638(3) (no account to be taken of transfer if transferor is excluded transferor), and section 681 (exemption for unrealised interest received by transferee after transfer).
Propose a change(1) In the case of a transfer of securities with unrealised interest to which section 630 applies, the amount of the accrued income profits treated as made is equal to the unrealised interest. (2) Subsection (1) is subject to section 660 (transfers with unrealised interest: interest in default). (3) In the case of a transfer of variable rate securities to which section 630 applies, the amount of the accrued income profits treated as made is such amount as is just and reasonable.
Propose a change(1) In the case of a transfer of securities with accrued interest, for the purposes of this Chapter a payment is treated as made by the transferee to the transferor in the interest period in which the settlement day falls. (2) The amount of that payment depends on whether the transfer is under an arrangement by which the transferee accounts to the transferor separately— (a) for the consideration for the securities, and (b) for gross interest accruing to the settlement day. (3) If the transfer is under such an arrangement, the amount of the payment is the amount of gross interest which the transferee accounts for. (4) If— (a) the transfer is not under such an arrangement, and (b) the settlement day is itself an interest payment day for the securities, the amount of the payment is the amount of interest payable on the securities on that day. (5) If— (a) the transfer is not under such an arrangement, and (b) the settlement day is not an interest payment day for the securities, the amount of the payment is an amount equal to— I × A B where— I is the interest payable on the securities on the first interest payment day after the settlement day (“the payment day”), A is the number of days in the period beginning with the first day on which that interest accrues and ending with the settlement day, and B is the number of days in the period beginning with the first day on which that interest accrues and ending with the payment day. (6) For the purposes of subsection (5), the first day on which that interest accrues is taken to be— (a) the day after the last interest payment day before the settlement day, or (b) if there was no interest payment day before the settlement day, the first day of the first interest period of the securities. (7) In a case where no one is treated as the transferor (see sections 648(4) and 649(5)), this section has effect as if— (a) in subsection (1) the words “to the transferor” were omitted, and (b) subsections (2), (3), (4)(a) and (5)(a) were omitted. (8) In a case where no one is treated as the transferee (see sections 621(2) and (3) and 648(2)), this section has effect as if— (a) in subsection (1) the words “by the transferee” were omitted, and (b) subsections (2), (3), (4)(a) and (5)(a) were omitted. (9) Subsections (2) to (5) are subject to section 662 (new securities issued with extra return: special rules about payments). (10) Subsections (4) and (5) are subject to section 659 (transfers with or without accrued interest: interest in default).
Propose a change(1) In the case of a transfer of securities without accrued interest, for the purposes of this Chapter a payment is treated as made by the transferor to the transferee in the interest period in which the settlement day falls. (2) The amount of that payment depends on whether the transfer is under an arrangement by which the transferor accounts to the transferee for gross interest accruing from the settlement day to the next interest payment day. (3) If the transfer is under such an arrangement, the amount of the payment is the amount of gross interest which the transferor accounts for. (4) If— (a) the transfer is not under such an arrangement, and (b) the settlement day is itself an interest payment day for the securities, the amount of the payment is nil. (5) If— (a) the transfer is not under such an arrangement, and (b) the settlement day is not an interest payment day for the securities, the amount of the payment is an amount equal to— I × A B where— I is the interest payable on the securities on the first interest payment day after the settlement day (“the payment day”), A is the number of days in the period beginning with the day after the settlement day and ending with the payment day, and B is the number of days in the period beginning with the first day on which that interest accrues and ending with the payment day. (6) For the purposes of subsection (5), the first day on which that interest accrues is taken to be— (a) the day after the last interest payment day before the settlement day, or (b) if there is no interest payment day before the settlement day, the first day of the first interest period of the securities. (7) In a case where no one is treated as the transferor (see section 648(4)), this section has effect as if— (a) in subsection (1) the words “by the transferor” were omitted, and (b) subsections (2), (3), (4)(a) and (5)(a) were omitted. (8) In a case where no one is treated as the transferee (see sections 621(2) and (3) and 648(2)), this section has effect as if— (a) in subsection (1) the words “to the transferee” were omitted, and (b) subsections (2), (3), (4)(a) and (5)(a) were omitted. (9) Subsection (5) is subject to section 659 (transfers with or without accrued interest: interest in default). (10) See also section 663(2) (reduction of amount of payment under this section where transfer to maker of manufactured payments).
Propose a change(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.
Propose a change(1) In the case of a transfer of variable rate securities 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 such amount as is just and reasonable. (3) No one is treated as making the payment. (4) 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. (5) See section 630 for the rules that apply to transfers of variable rate securities where the settlement day falls outside an interest period.
Propose a change(1) This section applies if— (a) an individual who is entitled to securities dies, and (b) the securities are transferred by the personal representatives to a legatee. (2) If the securities are transferred in the interest period in which the death occurs, no payment is treated as made under this Chapter as a result of the transfer. (3) If the securities are variable rate securities and the deceased dies after the end of the only or last interest period of the securities, no accrued income profits are treated as made under section 630(2). (4) In this section “legatee” includes any person taking (whether beneficially or as trustee)— (a) under a testamentary disposition, or (b) on an intestacy or partial intestacy. (5) Such a person includes a person taking as a result of an appropriation by personal representatives in or towards the satisfaction of a legacy or other interest or share in the deceased's property.
Propose a change(1) This section applies if— (a) a person is treated as making accrued income losses in an interest period as a result of transfers of securities, and (b) the period does not end with an interest payment day. (2) For the purposes of this Chapter the person is treated as making a payment on a transfer of the securities in the next interest period equal to the amount of the losses. (3) For cases where the period does end with an interest payment day, see sections 678 to 680 (exemptions for interest on securities involving accrued income losses).
Propose a change(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).
Propose a change(1) In relation to a transfer with accrued interest or transfer without accrued interest, an individual is an excluded transferor or excluded transferee unless the nominal value of securities held by the individual exceeds £5,000 on any day— (a) in the tax year in which the interest period ends, or (b) in the previous tax year. (2) In relation to a transfer with unrealised interest, an individual is an excluded transferor or excluded transferee unless the nominal value of securities held by the individual exceeds £5,000 on any day— (a) in the tax year in which the settlement day falls, or (b) in the previous tax year. (3) In relation to a transfer of variable rate securities, an individual is an excluded transferor unless the nominal value of securities held by the individual exceeds £5,000 on any day in the relevant tax year or the previous tax year. (4) In subsection (3) “the relevant tax year” means— (a) if the settlement day falls in an interest period, the tax year in which the interest period ends, or (b) otherwise, the tax year in which the settlement day falls. (5) For the purposes of this section, if— (a) an individual holds securities at a particular time, and (b) any interest on them which became payable at that time would be treated for income tax purposes as part of another individual's income, each of those individuals is treated as holding at that time the securities which the other holds, as well as those which that individual actually holds.
Propose a change(1) In relation to a transfer with accrued interest or transfer without accrued interest of securities that form part of a deceased person's estate, the deceased's personal representatives are an excluded transferor or excluded transferee unless the nominal value of securities held by the deceased's personal representatives as such exceeds £5,000 on any day— (a) in the tax year in which the interest period ends, or (b) in the previous tax year. (2) In relation to a transfer with unrealised interest of securities that form part of a deceased person's estate, the deceased's personal representatives are an excluded transferor or excluded transferee unless the nominal value of securities held by the deceased's personal representatives as such exceeds £5,000 on any day— (a) in the tax year in which the settlement day falls, or (b) in the previous tax year. (3) In relation to a transfer of variable rate securities that form part of a deceased person's estate, the deceased's personal representatives are an excluded transferor unless the nominal value of securities held by the deceased's personal representatives as such exceeds £5,000 on any day in the relevant tax year or the previous tax year. (4) In subsection (3) “the relevant tax year” has the meaning given by section 639(4).
Propose a change(1) In relation to a transfer with accrued interest or transfer without accrued interest of securities held on a disabled person's trusts, the trustees of the settlement are an excluded transferor or excluded transferee unless the nominal value of securities held by the trustees of the settlement as such exceeds £5,000 on any day— (a) in the tax year in which the interest period ends, or (b) in the previous tax year. (2) In relation to a transfer with unrealised interest of securities held on a disabled person's trusts, the trustees of the settlement are an excluded transferor or excluded transferee unless the nominal value of securities held by the trustees of the settlement as such exceeds £5,000 on any day— (a) in the tax year in which the settlement day falls, or (b) in the previous tax year. (3) In relation to a transfer of variable rate securities held on a disabled person's trusts, the trustees of the settlement are an excluded transferor unless the nominal value of securities held by the trustees of the settlement as such exceeds £5,000 on any day in the relevant tax year or the previous tax year. (4) In this section— “disabled person's trusts” means trusts falling within paragraph 3 of Schedule 1C to TCGA 1992 (application of annual exempt amount), and “the relevant tax year” has the meaning given by section 639(4).
Propose a change(1) In relation to a transfer of securities by a person carrying on a trade, the person is an excluded transferor if the transfer is taken into account for income tax purposes in calculating the profits or losses of the trade. (2) In relation to a transfer of securities at any time to a person carrying on a trade, the person is an excluded transferee if, had the transfer been made by the person at that time, it would have been taken into account for income tax purposes in calculating the profits or losses of the trade.
Propose a change(1) A person is— (a) an excluded transferor in relation to a transfer by the person, and (b) an excluded transferee in relation to a transfer to the person, if the person is non-UK resident throughout the tax year in which the transfer occurs .... (2) In the case of a person who is carrying on a trade in the United Kingdom through a branch or agency during any part of that year (“a UK branch trader”), subsection (1) is subject to subsections (3) and (4). (3) A UK branch trader is not an excluded transferor under subsection (1) if the securities transferred were situated in the United Kingdom and used or held for the purposes of the branch or agency at or before the time of the transfer. (4) A UK branch trader is not an excluded transferee under subsection (1) if the securities transferred were situated in the United Kingdom at the time of the transfer and were acquired for use by or for the purposes of the branch or agency. (5) In this section “branch or agency” has the meaning given by section 1B(5) of TCGA 1992. (6) The place where securities are situated is determined for the purposes of this section in accordance with sections 275(1) and (2)(b) and 275C of TCGA 1992. (7) Further provision about trustees who are non-UK resident is made in section 667 (trustees' accrued income profits treated as settlement income).
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Propose a change(1) A person is— (a) an excluded transferor in relation to a transfer of securities by the person, and (b) an excluded transferee in relation to a transfer of securities to the person, if condition A or B is met. (2) Condition A is that if the person— (a) became entitled to any interest on the securities, and (b) applied it for charitable purposes only, exemption could be granted in respect of the interest under section 532 (exemption for certain savings and investment income that belongs to a charitable trust and is applicable and applied to charitable purposes only). (3) Condition B is that if the person— (a) became entitled to any interest on the securities, and (b) applied it for the purposes mentioned in section 533 (exemption for public revenue dividends that are applied only for the repair of college or church buildings etc), exemption could be granted in respect of the interest under that section. (4) For the transfer treated as occurring where charitable trusts over securities cease, see section 652 (securities ceasing to be held on charitable trusts).
Propose a changeA person is— (a) an excluded transferor in relation to a transfer of securities by the person, and (b) an excluded transferee in relation to a transfer of securities to the person, if, were the person to become entitled to interest on the securities, exemption in respect of it would be allowable under section 186 of FA 2004 (exemption for income from investments held for the purposes of a registered pension scheme).
Propose a change(1) This section applies if the manufactured payments conditions are met. (2) The manufactured payments conditions are that— (a) securities are transferred without accrued interest to a person (“the seller”), (b) the seller makes a contract for the sale of securities of that kind (“the seller's contract”), and (c) any contract under which the securities are transferred to the seller, or the seller's contract itself, is a manufactured payments contract. (3) The seller is an excluded transferee in relation to the transfer to the seller if the nominal value of the securities subject to the seller's contract equals or exceeds that of the securities transferred to the seller. (4) The seller is an excluded transferor in relation to the transfer of securities under the seller's contract. (5) See section 663 (transfers without accrued interest to makers of manufactured payments) for cases where that nominal value is less than that of the securities transferred to the seller. (6) In this section “manufactured payments contract” means a contract under which— (a) the seller is required to pay another person an amount which is representative of a periodical payment of interest on UK securities under an arrangement between them for the transfer of the securities, or (b) the seller is required to pay another person an amount which is representative of an overseas dividend on overseas securities under an arrangement between them for the transfer of the securities. (7) In this section— (a) “overseas securities” means shares, stock or other securities issued by— (i) a government, local authority or other public authority of a territory outside the United Kingdom, or (ii) another non-UK resident body of persons, and includes shares in a non-UK resident company, (b) “overseas dividend” means any interest, dividend or other annual payment payable in respect of overseas securities, and (c) “UK securities” means securities of— (i) the government of the United Kingdom, (ii) a local authority in the United Kingdom, (iii) another public authority in the United Kingdom, or (iv) a UK resident company or other UK resident body, but does not include shares in a UK resident company.
Propose a change(1) The exchange of a gilt-edged security for strips of that security is treated for the purposes of this Chapter as a transfer of the security by the person who exchanges the security. (2) But no one is treated as the transferee. (3) The exchange of strips of a gilt-edged security for a single gilt-edged security consolidating those strips is treated for the purposes of this Chapter as a transfer of the single security to the person who exchanges those strips. (4) But no one is treated as the transferor. (5) An exchange within subsection (1) or (3) is treated as a transfer without accrued interest if it is made at any time after the balance has been struck for a dividend on the security but before the day on which that dividend is payable. (6) In any other case, such an exchange is treated as a transfer with accrued interest. (7) If an exchange is treated as a transfer under subsection (1) or (3), any transaction forming part of the exchange is not itself a transfer for the purposes of this Chapter. (8) In this section “strip” has the meaning given by section 444 of ITTOIA 2005. (9) For the meaning of “gilt-edged security”, see section 1024.
Propose a change(1) This section applies if— (a) securities (“old securities”) of a particular kind are issued by way of an original issue of securities of that kind, (b) on a later occasion securities (“new securities”) of the same kind are issued, (c) a sum (“the extra return”) is payable in respect of the new securities by the issuer of them to reflect the fact that interest is accruing on the old securities, (d) the issue price of the new securities includes an element (whether or not separately identified) representing payment for the extra return, and (e) the extra return is equal to the amount of interest mentioned in subsection (2). (2) The amount of interest referred to in subsection (1)(e) is— (a) the amount of interest payable for the relevant period on so many old securities as there are new, or (b) if there are more new securities than old, the amount of interest which would be so payable if there were as many old securities as new. (3) This section does not apply if the new securities are variable rate securities. (4) The new securities are treated as transferred with accrued interest to the person to whom they are issued on the new issue day. (5) But no one is treated as the transferor. (6) For the purposes of this Chapter, the settlement day for the transfer is taken to be the new issue day. (7) See section 662 for the amount of the payment treated as made in the case of the transfer. (8) In this section— “the relevant period” is the period beginning with the day after— the only or last interest payment day before the new issue day, or if there is no interest payment day before the new issue day, the day on which the old securities are issued, and ending with the new issue day, and “the new issue day” is the day on which the new securities are issued.
Propose a change(1) Subsection (2) applies if a person— (a) acquires securities otherwise than as trading stock of a trade the person carries on, and (b) appropriates the securities as trading stock for the purposes of such a trade (whether on the start of the trade or otherwise). (2) The person is treated for the purposes of this Chapter as transferring the securities otherwise than in the course of the trade, and re-acquiring them in the course of the trade, on the day of appropriation. (3) Subsection (4) applies if securities— (a) form part of the trading stock of a person's trade, and (b) are appropriated by the person for any other purpose. (4) The person is treated for the purposes of this Chapter as transferring the securities in the course of the trade, and re-acquiring them otherwise than in the course of the trade, on the day of appropriation. (5) Subsection (6) applies if securities— (a) form part of the trading stock of a person's trade, and (b) are retained by the person on ceasing to carry on the trade. (6) The person is treated for the purposes of this Chapter as transferring the securities in the course of the trade, and re-acquiring them otherwise than in the course of the trade, on the day of cessation. (7) See sections 623(2) to (4) and 624(2) to (4) for cases where securities are treated as transferred with or without accrued interest where this section applies.
Propose a change(1) This section applies if a person entitled to securities otherwise than as trustee becomes trustee of them. (2) The person is treated for the purposes of this Chapter as transferring the securities at the time the person becomes trustee of them. (3) The transfer is treated as being made— (a) by the person in a capacity other than trustee, and (b) to the person and, if there are any other trustees, to the others in the capacity of trustees. (4) See sections 623(2) to (4) and 624(2) to (4) for cases where securities are treated as transferred with or without accrued interest where this section applies.
Propose a change(1) This section applies if securities held on charitable trusts cease to be subject to those trusts. (2) The trustees are treated for the purposes of this Chapter as transferring the securities at the time when the securities cease to be so subject. (3) The transfer is treated as being made by the trustees in their capacity as charitable trustees to themselves in another capacity. (4) See sections 623(2) to (4) and 624(2) to (4) for cases where securities are treated as transferred with or without accrued interest where this section applies.
Propose a changeThis Chapter does not apply to transfers of securities in circumstances such that any disposal and acquisition are disregarded for the purposes of capital gains tax as a result of section 263B(2) of TCGA 1992 (capital gains tax exemption for disposals in pursuance of stock lending arrangements).
Propose a change(1) This section applies for the purposes of sections 655 to 658. (2) There is a sale and repurchase arrangement in respect of securities if the securities are transferred under an agreement to sell them and— (a) the transferor (“T”) or a person connected with T is required to buy back the securities by the agreement or a related agreement, (b) T or a person connected with T is required to buy back the securities as a result of the exercise of an option acquired under the agreement or a related agreement, or (c) T or a person connected with T exercises an option to buy back the securities which was acquired under the agreement or a related agreement. (3) Agreements are related for the purposes of this section if they are entered into in pursuance of the same arrangement (regardless of the date on which either agreement is entered into). (4) References in this section to buying back securities include— (a) buying similar securities, and (b) in the case of a person connected with T, buying the securities sold by T or similar securities. (5) Subsection (4) applies even if the person buying the securities has not held them before. (6) References in sections 656 and 657 to repurchase are to be read accordingly. (7) Securities are similar for the purposes of subsection (4) if they give their holders— (a) the same rights against the same persons as to capital and interest, and (b) the same remedies to enforce those rights. (8) Subsection (7) applies even if there is a difference in— (a) the total nominal amounts of the securities, (b) the form in which they are held, or (c) the manner in which they can be transferred.
Propose a change(1) If there is a sale and repurchase arrangement in respect of securities, this Chapter does not apply to the transfer by T or the transfer back under the arrangement. (2) But subsection (1) does not apply if section 608 prevents section 607 (treatment of price differences under repos) from applying in relation to the arrangement.
Propose a change(1) The Treasury may by regulations provide for section 655 to apply with modifications in relation to cases involving non-standard sale and repurchase arrangements. (2) A case involves a non-standard sale and repurchase arrangement if— (a) there is a sale and repurchase arrangement in respect of securities, (b) T makes a sale of the securities under the agreement to sell them (“the original sale”), (c) the securities are UK shares, UK securities or overseas securities, and (d) any of conditions A to E is met in relation to the sale and repurchase arrangement. (3) Condition A is that— (a) the obligation to buy back the securities is not performed, or (b) the option to buy them back is not exercised. (4) Condition B is that provision is made by or under an agreement for different or additional UK shares, UK securities or overseas securities to be treated as (or as included with) representative securities. (5) Condition C is that provision is made by or under an agreement for any UK shares, UK securities or overseas securities to be treated as not included with representative securities. (6) Condition D is that provision is made by or under an agreement for the sale price or repurchase price to be decided or varied wholly or partly by reference to post-agreement fluctuations. (7) Condition E is that provision is made by or under an agreement for a person to be required, in a case where there are post-agreement fluctuations, to make a payment in the period— (a) beginning immediately after the making of the agreement for the original sale, and (b) ending when the repurchase price becomes due. (8) “Post-agreement fluctuations” are fluctuations in the value of — (a) securities transferred in pursuance of the original sale, or (b) representative securities, which occur in the period after the making of the agreement for the original sale. (9) “Representative securities” are UK shares, UK securities or overseas securities which, for the purposes of the repurchase, are to represent securities transferred in pursuance of the original sale.
Propose a change(1) The Treasury may by regulations provide for section 655 to apply with modifications in relation to cases involving redemption arrangements. (2) A case involves redemption arrangements if— (a) arrangements, corresponding to those made in cases where there is a sale and repurchase arrangement in respect of securities, are made by an agreement, or one or more related agreements, in relation to securities that are to be redeemed in the period after their sale, (b) the securities are UK shares, UK securities or overseas securities, and (c) the arrangements are such that the seller or a person connected with the seller (instead of being required to repurchase the securities or acquiring an option to do so) is granted rights in respect of the benefits that will result from the redemption.
Propose a change(1) Regulations under section 656 or 657 may make different provision for different cases. (2) Regulations under either section may contain incidental, supplemental, consequential and transitional provision and savings. (3) In this section and sections 656 and 657 “modifications” includes exceptions and omissions. (4) Accordingly, a power in sections 656 and 657 to provide for a provision to apply with modifications in relation to a particular case includes power to provide for the provision not to apply in relation to that case. (5) Subsections (6) to (10) apply for the purposes of sections 656 and 657 and this section. (6) “UK shares” means shares in a UK resident company. (7) “UK securities” means securities of— (a) the government of the United Kingdom, (b) a local authority in the United Kingdom, (c) another public authority in the United Kingdom, or (d) a UK resident company or other UK resident body. (8) But “UK securities” does not include UK shares. (9) “Overseas securities” means shares, stock or other securities issued by— (a) a government, local authority or other public authority of a territory outside the United Kingdom, or (b) another non-UK resident body of persons. (10) “Overseas securities” includes shares in a non-UK resident company.
Propose a change(1) This section applies if— (a) the amount of the payments treated as made on a transfer of securities is to be determined under section 632(4) or (5), 633(5) or 662(4) (cases where interest is not accounted for separately), (b) there has been a failure to pay interest due on the securities, and (c) as a result of the failure, on the interest payment day which is or follows the settlement day the value of the right to receive the interest payable on the securities is less than the interest payable. (2) 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.
Propose a change(1) This section applies if— (a) securities are transferred with unrealised interest, (b) there has been a failure to pay interest due on the securities transferred, and (c) as a result of the failure, on the day of the transfer the value of the right to receive the unrealised interest (“the unrealised interest value”) is less than the unrealised interest. (2) 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. (3) 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. (4) Subsections (2) and (3) are subject to section 661 (successive transfers with unrealised interest in default). (5) 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. (6) See also section 681 (exemption for unrealised interest received by transferee after transfer).
Propose a change(1) 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. (2) The amount of the reduction depends on whether subsection (3) applies. (3) This subsection applies if— (a) T has received, as transferee, some or all of that unrealised interest, and (b) T is liable for income tax on it for the tax year in which it was received. (4) 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. (5) If subsection (3) does not apply, the reduction is equal to the earlier value. (6) But if the reduction under subsection (4) or (5) exceeds the amount mentioned in subsection (1), that amount is treated as reduced to nil.
Propose a change(1) 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). (2) Instead, that amount depends on whether under the issue arrangements the person to whom the new securities are issued accounts to the issuer separately— (a) for the extra return, and (b) for the rest of the issue price. (3) If the person does account for them separately, the amount of the payment is the amount of the extra return separately accounted for. (4) If the person does not account for them separately, the amount of the payment is an amount equal to— I × 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. (5) Subsection (4) is subject to section 659 (transfers with or without accrued interest: interest in default). (6) In this section “the extra return”, “the new issue day”, “new securities” and “the relevant period” have the same meaning as in section 649.
Propose a change(1) This section applies if— (a) the manufactured payments conditions are met (see section 647(2)), and (b) the nominal value of the securities subject to the seller's contract is less than that of the securities transferred to the seller. (2) 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. (3) 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. (4) 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. (5) In this section “the seller” and “the seller's contract” have the same meaning as in section 647. (6) For cases where subsection (1)(b) does not apply, see section 647(3) (under which the seller is treated as an excluded transferee).
Propose a change(1) 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”). (2) 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. (3) If the sterling equivalent is so shown, the amount of the payment is taken to be that sterling equivalent. (4) 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. (5) 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. (6) 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.
Propose a change