Commentary on Sections Overview Chapter 2: Accrued income profits and losses Section 666: Certain transfers by or to nominees or trustees treated as made by or to others
1970.This section provides for another person (or persons) to be regarded as the transferor or transferee if there is a transfer by or to trustees or nominees. It is based on section 720 of ICTA.
1971.Subsection (1) ensures that, where someone holds securities through a nominee, transfers of securities by or to the nominee are treated as being made by or to the person for whom the nominee acts. Consequently the charges under the accrued income scheme fall not on the nominee but on the principal.
1972.Likewise, subsection (2) ensures that, where securities are held on trust but the beneficiary is absolutely entitled to direct how the securities are to be dealt with, transfers of securities by or to the trustees are treated as being made by or to the beneficiary.
1973.Subsections (3), (4) and (5) explain what is meant by a beneficiary being “absolutely entitled” against a trustee. Subsection (8) provides that a lack of legal capacity is ignored in deciding whether someone is absolutely entitled against a trustee.
1974.Subsections (6) and (7) apply the same rules as in subsections (1) and (2) but where two or more persons effectively own the securities. As subsection (7) makes provision for the case where two or more persons are absolutely entitled against a trustee, for consistency subsection (6) spells out for the case of nominees what may otherwise be derived from the application of the Interpretation Act 1978.