Income Tax Act 2007 section 642

Traders

Section 642 excludes financial traders from the accrued income scheme, on the basis that their securities transactions are already captured within their trading profit or loss calculations.

• Traders who transfer securities are treated as "excluded transferors" where the transfer is already reflected in their trading profits or losses for income tax purposes.
• Traders who receive securities are treated as "excluded transferees" where, had they made the same transfer at that time, it would have been included in their trading profit or loss computation.
• The exclusion prevents double counting, since trading profits and losses on securities are already subject to income tax through the normal trading income rules.
• The exclusion applies to anyone carrying on a trade, provided the securities transaction in question forms part of the trade's income tax computation.