Income Tax Act 2007 section 679

Interest on securities involving accrued income losses: general

Section 679 provides an exemption from income tax on interest from securities where accrued income losses have arisen from transfers of those securities during the same interest period.

• Where accrued income losses arise from transfers of securities during an interest period that ends on an interest payment day, the interest due is exempt from tax to the extent it does not exceed those losses
• Any interest in excess of the accrued income losses remains subject to income tax in the normal way
• If the exemption would otherwise apply in more than one tax year (for example in partnership situations), it is restricted to the tax year in which the interest period ends
• Where an interest period does not end on an interest payment day, separate rules under section 637 apply to treat the accrued income losses as payments in the next interest period