Income Tax Act 2007 section 625

Transfers with unrealised interest

Section 625 defines what it means for securities to be transferred "with unrealised interest" and establishes the terminology used throughout the chapter.

• Securities are transferred with unrealised interest when they carry the right to receive interest that was due on an interest payment day falling before the settlement day
• This typically arises with bearer securities that have separate coupons for each interest instalment, where the interest due date has passed but the holder has not yet collected payment
• The uncollected interest attached to the transferred securities is referred to throughout the chapter as "unrealised interest"
• The definition is not limited to bearer securities and may apply in other circumstances where securities are transferred with interest that is ripe for payment but has not yet been collected