Income Tax Act 2007 section 671

Meaning of "interest"

Section 671 defines what "interest" means for the purposes of the accrued income scheme chapter, broadening it beyond its everyday meaning to cover various types of returns on securities.

• For this chapter, "interest" is given an expanded meaning that goes beyond its ordinary definition
• The term includes dividends and any other form of return on a security, regardless of how that return is described or labelled
• This broad definition accounts for gilt-edged securities where returns are traditionally called "dividends" even though they are effectively interest payments
• The definition specifically excludes any return that consists solely of the difference between a security's redemption price and its original issue price (i.e. a discount on issue)