»Ê¹ÚÌåÓýapp

If the securities are transferred without accrued interest or `ex divâ€� the transferor will retain the right to receive the next interest payment. »Ê¹ÚÌåÓýapp transferor will have to compensate the transferee for the interest which arises after the date of sale. »Ê¹ÚÌåÓýapp Accrued Income Scheme calls this the rebate amount. ITA07/S633 gives the transferor relief for the rebate amount, see SAIM4150+. »Ê¹ÚÌåÓýapp transferee is treated as though they received a sum equal to the rebate amount.

For Capital Gains Tax purposes the following adjustments are required.

· Transferor - the disposal proceeds are increased by the value of the rebate amount

· Transferee - the acquisition cost is increased by the value of the rebate amount.

Example

· 1 January 2017 Mr Bates buys £100,000 UK Computer PLC 10 per cent convertible loan stock for £108,000. Interest is payable on 1 January and 1 July.

· 22 June 2018 Mr Bates sells the loan stock at a `clean price�, see IM4235, of £106,000.

· Mr Bates has to compensate the purchaser for the loss of nine days� interest, £247.

· »Ê¹ÚÌåÓýapp Accrued Income Scheme gives Mr Bates relief for a rebate amount of £247.

Capital Gains Tax computation

Ìý	£
Disposal proceeds	105,753
plus Rebate Amount	247
Ìý	106,000
less Cost	108,000
Loss	(2,000)

»Ê¹ÚÌåÓýapp purchaser will have made a net payment of £105,753. »Ê¹ÚÌåÓýapp rebate amount of £247 will be taxed under the Accrued Income Scheme. For Capital Gains Tax purposes the acquisition cost becomes £106,000.