Income Tax Act 2007 section 650

Trading stock appropriations etc.

Section 650 deals with how the accrued income scheme treats changes in the capacity in which a person holds securities, particularly when securities move between trading stock and personal investment status, or when a trade ceases.

• When securities held personally are appropriated as trading stock, the holder is treated as having transferred them out of non-trading use and re-acquired them within the trade on the date of appropriation.
• When securities held as trading stock are appropriated for a non-trading purpose, the holder is treated as having transferred them within the trade and re-acquired them outside the trade on the date of appropriation.
• When securities remain in a person's hands after they cease trading, the holder is treated as having transferred them within the trade and re-acquired them outside the trade on the date the trade ceased.
• Once a deemed transfer arises under this section, sections 623 and 624 determine whether the securities are treated as transferred with or without accrued interest for the purposes of the accrued income scheme.