Section 638 — Income Tax Act 2007: Excluded persons: disregard of certain payments and transfers

Excluded persons: disregard of certain payments and transfers 638 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).