SAIM4240 | Accrued Income Scheme: special cases: overview

Special cases

The Accrued Income Scheme is adapted to deal with a number of special situations. These fall into the following categories.

Particular transactions treated as transfers, and excluded transfers

There are special rules for transfers that involve

• strips of gilt-edged securities (SAIM4250)

• new securities issued with extra interest (securities issued in tranches). In this case, special rules on calculations apply - see below (SAIM4260)

• transactions by persons to and from themselves in different capacities - namely persons appropriating securities as trading stock, persons becoming trustees, and where securities cease to be held on charitable trusts (SAIM4270).

In addition, certain transfers are completely excluded from the scheme. These are cases that involve stock lending and repos (SAIM4280).

Special rules about some types of calculation

The rules on how accrued income amounts are calculated are adapted in cases that involve

• ‘interest in default’ (where interest is due but unpaid, including the case where there is also unrealised interest on the security) (SAIM4290)

• new securities issued with extra interest (one of the particular categories of transfer - see above) (SAIM4260)

• manufactured payments (SAIM4220)

• foreign currency securities (SAIM4310).

Nominees and trustees

Special rules apply to transfers by or to nominees or trustees (SAIM4320).

Unremittable proceeds

Special rules apply where proceeds from ‘foreign securities’ are unremittable (SAIM4340).