Income Tax Act 2007 section 621

Transferors and transferees

Section 621 defines who counts as the "transferor" and "transferee" for the purposes of the accrued income profits rules, with special provisions for conversions and redemptions where the securities cease to exist rather than pass to a new holder.

• The terms "transferor" and "transferee" generally follow the meaning of "transfer" as defined in section 620, but with important exceptions for conversions and redemptions.
• When securities are converted or redeemed, the person who held the securities immediately beforehand is treated as the transferor, but there is no transferee — because the securities cease to exist rather than passing to someone else.
• Additional rules identifying the transferor or transferee apply in specific situations, including strips of gilt-edged securities, new securities issued with extra return, trading stock appropriations, securities held by trustees, securities leaving charitable trusts, and transfers involving nominees.
• Certain persons are excluded from being treated as transferors or transferees under the provisions in sections 638 to 647.