Income Tax Act 2007 section 636

Exception where there is a transfer to a legatee

Section 636 provides relief from the accrued income scheme when personal representatives transfer securities belonging to a deceased person to a legatee.

• When securities are transferred to a legatee within the interest period in which the deceased died, no accrued income payment is treated as made, so no accrued income profit or loss arises for either the personal representatives or the legatee.
• For variable rate securities where the deceased died after the end of the only or last interest period, no accrued income profits are treated as arising on the transfer to the legatee.
• If the transfer to the legatee takes place outside the interest period in which the death occurred, the normal accrued income scheme rules apply to that transfer.
• A "legatee" is broadly defined to include anyone taking under a will, on intestacy, or through an appropriation by personal representatives in satisfaction of a legacy or share in the estate.