Income Tax Act 2007 section 631

Amount of accrued income profits where section 630 applies

Section 631 quantifies the amount of accrued income profits arising on transfers of securities where the settlement day falls outside an interest period, as covered by section 630.

• For transfers of securities with unrealised interest under section 630, the accrued income profits equal the unrealised interest on those securities.
• This standard calculation is subject to a special rule in section 660, which applies where the interest on the transferred securities is in default.
• For transfers of variable rate securities under section 630, the accrued income profits are calculated as a just and reasonable amount rather than a fixed formula.
• The section therefore distinguishes between fixed interest securities, where the profit equals unrealised interest, and variable rate securities, where a fair estimate must be made.