Income Tax Act 2007 section 626

Transfers of variable rate securities

Section 626 excludes transfers of variable rate securities from the standard accrued income rules, so that they are governed by their own dedicated provisions instead.

• The normal rules for transfers with accrued interest (section 623) and transfers without accrued interest (section 624) do not apply to variable rate securities.
• A transfer of a variable rate security is never treated as either a transfer with accrued interest or a transfer without accrued interest.
• Instead, variable rate securities are subject to their own specific rules found in sections 630, 631 and 635.
• This carve-out simplifies the legislation by removing the need to modify the standard accrued income rules when dealing with variable rate securities.