Commentary on Sections Overview Chapter 2: Accrued income profits and losses Section 620: Transactions which are transfers: general
1812.This section defines “transfer” for the purposes of the Chapter. It is based on section 710 of ICTA. “Transfers” are the transactions and events giving rise to the income tax charge (or relief) for accrued income profits (or losses).
1813.Subsection (1) is subject to the cases mentioned in subsection (6), which exclude certain transfers from the application of the Chapter in the case of strips of gilt-edged securities, stock lending and sale and repurchase agreements.
1814.The vesting of securities in trustees is a transfer within subsection (1). But where securities vest on the appointment of a new or additional trustee, and the new or additional trustees are resident in the United Kingdom, there are no net accrued income scheme consequences because the payments treated as made effectively cancel each other out. This may not be the case if the new or additional trustees are not resident in the United Kingdom.
1815.Subsection (3) deals with the timing of the transfer where there is an agreement for the transfer of securities. The transfer is treated as taking place when the agreement is made, even if the agreement provides for the transfer of the securities at some future date.
1816.The time at which a transfer occurs is important for a number of provisions in the accrued income scheme (see, for example, section 660(1)). The time of the transfer must be distinguished from the settlement day for the transfer, although the two dates may be the same in certain circumstances.