Section 648 — Income Tax Act 2007: Strips of gilt-edged securities

Strips of gilt-edged securities 648 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.