Section 635 — Income Tax Act 2007: Payment on transfer of variable rate securities

Payment on transfer of variable rate securities 635 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.