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(1) | Tax is charged under this Chapter on the full amount of the accrued income |
| |
profits treated as made in the tax year. |
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(2) | Accrued income profits within section 628(5) (profits treated as made where |
| |
the settlement day falls within an interest period) are treated as made in the tax |
| 5 |
year in which the last day of the interest period in which the profits are treated |
| |
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(3) | Accrued income profits within section 630(2) (profits treated as made where |
| |
the settlement day falls after the end of the securities’ last interest period) are |
| |
treated as made in the tax year in which the settlement day for the transfer falls. |
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(4) | Accrued income profits within section 670(2) or (3) (withdrawal of relief for |
| |
unremittable transfer proceeds) are treated as made in the tax year in which the |
| |
proceeds cease to be unremittable. |
| |
(5) | Section 668(5) (when proceeds are unremittable) applies for the purposes of |
| |
subsection (4) as it applies for the purposes mentioned in section 668(5). |
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(6) | For the meaning of “interest period” and “the settlement day”, see sections 673 |
| |
| |
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(1) | The person liable for any tax charged under this Chapter is the person treated |
| |
as making the accrued income profits. |
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(2) | But see section 666 (under which nominees and trustees may be disregarded). |
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Securities to which Chapter applies |
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619 | Meaning of “securities” and when securities are of the same kind |
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(1) | In this Chapter “securities” includes— |
| |
(a) | any loan stock or similar security other than an excluded security, and |
| 25 |
(b) | shares in a building society which are qualifying shares for the |
| |
purposes of section 117(4) of TCGA 1992 (qualifying corporate bonds), |
| |
| but (subject to paragraph (b)) it does not include any shares in a company. |
| |
(2) | For the purposes of subsection (1)(a), it does not matter— |
| |
(a) | whether the security is of the government of the United Kingdom, any |
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other government, any public or local authority in the United Kingdom |
| |
or elsewhere, or any company or other body, |
| |
(b) | whether or not the security is secured, |
| |
(c) | whether or not the security carries a right to interest of a fixed amount |
| |
or at a fixed rate percentage of the nominal value of the security, or |
| 35 |
(d) | whether or not the security is in bearer form. |
| |
(3) | In this section “excluded securities” means— |
| |
(a) | national savings certificates (including Ulster Savings Certificates as |
| |
defined in section 693(7) of ITTOIA 2005), |
| |
(b) | war savings certificates, |
| 40 |
(c) | uncertificated eligible debt security units as defined in section 986, |
| |
|
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|
| |
|
(d) | certificates of deposit (see section 1019), |
| |
(e) | a security which is a right falling within section 552(1)(c) of ITTOIA |
| |
2005 at the time of the transfer in question, |
| |
(f) | a security that meets the redemption conditions (see subsection (5)), |
| |
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(g) | a security that is a deeply discounted security within the meaning of |
| |
Chapter 8 of Part 4 of ITTOIA 2005. |
| |
(4) | But subsection (3)(g) does not include a security if, on its transfer, Chapter 8 of |
| |
Part 4 of ITTOIA 2005 would apply subject to the rules in sections 454 to 456 of |
| |
that Act (listed securities held since 26 March 2003). |
| 10 |
(5) | The redemption conditions are that— |
| |
(a) | the security is redeemable, |
| |
(b) | the amount payable on its redemption exceeds its issue price, and |
| |
(c) | no return other than the amount of that excess is payable on it. |
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(6) | Securities are treated as being of the same kind for the purposes of this Chapter |
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(a) | are treated as being of the same kind by the practice of a recognised |
| |
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(b) | would be so treated if dealt in on such an exchange. |
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Transfers to which Chapter applies |
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620 | Transactions which are transfers: general |
| |
(1) | References in this Chapter to the transfer of securities are— |
| |
(a) | to the transfer of securities by way of sale, exchange, gift or otherwise, |
| |
(b) | to the conversion of securities in any case where there is no transfer of |
| |
the securities within paragraph (a), |
| 25 |
(c) | to the redemption of variable rate securities, or |
| |
(d) | to a transaction or event treated as a transfer under— |
| |
(i) | section 648(1) or (3) (strips of gilt-edged securities), |
| |
(ii) | section 649(4) (new securities issued with extra return), |
| |
(iii) | section 650(2), (4) or (6) (trading stock appropriations etc), |
| 30 |
(iv) | section 651(2) (owner becoming entitled to securities as trustee), |
| |
| |
(v) | section 652(2) (securities ceasing to be held on charitable trusts). |
| |
(2) | But subsection (1)(a) does not include— |
| |
(a) | the vesting of securities in personal representatives on death, or |
| 35 |
(b) | the transfer of a security to which Chapter 8 of Part 4 of ITTOIA 2005 |
| |
applies subject to the rules in sections 454 to 456 of that Act. |
| |
(3) | For the purposes of this Chapter— |
| |
(a) | a transfer of securities under an agreement takes place when the |
| |
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(b) | the person to whom they are to be transferred under the agreement |
| |
becomes entitled to them at that time. |
| |
(4) | But in the case of a conversion of securities within subsection (1)(b), the transfer |
| |
takes place on the day of the conversion. |
| |
|
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|
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|
(5) | And in the case of a redemption of securities within subsection (1)(c), the |
| |
transfer takes place on the day of the redemption. |
| |
(6) | Subsection (1) is subject to— |
| |
section 648(7) (transactions forming part of exchanges concerning strips of |
| |
| 5 |
section 653 (stock lending), and |
| |
section 655 (transfers under sale and repurchase arrangements). |
| |
(7) | In this Chapter “conversion”, in relation to securities, has the meaning given by |
| |
section 132 of TCGA 1992. |
| |
621 | Transferors and transferees |
| 10 |
(1) | In this Chapter “transferor” and “transferee” are to be read in accordance with |
| |
section 620 (but this is subject to subsections (2) to (4)). |
| |
(2) | In the case of a conversion of securities within section 620(1)(b)— |
| |
(a) | the person who was entitled to the securities immediately before the |
| |
conversion is treated as the transferor, but |
| 15 |
(b) | no one is treated as the transferee. |
| |
(3) | In the case of a redemption of securities within section 620(1)(c)— |
| |
(a) | the person who was entitled to the securities immediately before the |
| |
redemption is treated as the transferor, but |
| |
(b) | no one is treated as the transferee. |
| 20 |
(4) | The following provisions also contain rules about who is the transferor or the |
| |
transferee for certain transfers— |
| |
section 648(1) to (4) (strips of gilt-edged securities), |
| |
section 649(4) and (5) (new securities issued with extra return), |
| |
section 650 (trading stock appropriations etc), |
| 25 |
section 651(2) and (3) (owner becoming entitled to securities as trustee), |
| |
section 652(2) and (3) (securities ceasing to be held on charitable trusts), |
| |
| |
section 666 (certain transfers by or to nominees or trustees treated as made |
| |
| 30 |
(5) | See also sections 638 to 647 (excluded transferors and transferees). |
| |
622 | Application of Chapter to different kinds of transfer |
| |
(1) | Different rules apply under this Chapter for the different kinds of transfer |
| |
specified in subsection (2). |
| |
| 35 |
(a) | transfers with accrued interest (see section 623), |
| |
(b) | transfers without accrued interest (see section 624), |
| |
(c) | transfers with unrealised interest (see section 625), and |
| |
(d) | transfers of variable rate securities (see section 626). |
| |
(3) | If a transfer is both a transfer with unrealised interest and a transfer of a kind |
| 40 |
specified in subsection (2)(a), (b) or (d), both the provisions of this Chapter |
| |
applicable to transfers with unrealised interest and the provisions applicable to |
| |
the other kind of transfer apply to the transfer. |
| |
|
| |
|
| |
|
623 | Transfers 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 |
| |
| |
(a) | in a case where the settlement day is an interest payment day, on the |
| 5 |
| |
(b) | in any other case, on the first interest payment day after the settlement |
| |
| |
(2) | But, in the case of the transfers specified in subsection (3), subsection (4) applies |
| |
instead of subsection (1). |
| 10 |
(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). |
| 15 |
(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 |
| |
| |
(5) | This section is subject to section 626 (transfers of variable rate securities). |
| |
| 20 |
section 648(6) (certain exchanges of strips treated as transfers with |
| |
| |
section 649(4) (issue of new securities with extra return treated as transfer |
| |
| |
624 | Transfers without accrued interest |
| 25 |
(1) | The general rule is that securities are transferred without accrued interest for |
| |
the purposes of this Chapter if they are transferred without the right to receive |
| |
interest payable as mentioned in section 623(1)(a) or (b). |
| |
(2) | But, in the case of the transfers specified in subsection (3), subsection (4) applies |
| |
instead of subsection (1). |
| 30 |
(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). |
| 35 |
(4) | If the person treated as the transferor did not have the right to receive interest |
| |
payable as mentioned in section 623(1)(a) or (b), the securities are treated as |
| |
transferred without accrued interest. |
| |
(5) | This section is subject to section 626 (transfers of variable rate securities). |
| |
(6) | See also section 648(5) (certain exchanges of strips treated as transfers without |
| 40 |
| |
|
| |
|