Income Tax Act 2007 section 622

Application of Chapter to different kinds of transfer

Section 622 identifies the four different kinds of security transfer to which the accrued income profits rules apply and explains how overlapping categories are handled.

• The accrued income profits rules distinguish four types of transfer: with accrued interest, without accrued interest, with unrealised interest, and of variable rate securities.
• The type of transfer determines whether a deemed payment or profit arises, who is treated as making it, and its amount.
• Where a transfer involves unrealised interest and also falls into one of the other three categories, both sets of rules apply simultaneously, potentially giving rise to two separate deemed payments.
• The detailed definitions of each transfer type and the calculation of resulting accrued income profits and losses are set out in sections 623 to 635.