Section 647 | Makers of manufactured payments

(1)This section applies if the manufactured payments conditions are met.

(2)The manufactured payments conditions are that—

(a)securities are transferred without accrued interest to a person (“the seller”),

(b)the seller makes a contract for the sale of securities of that kind (“the seller's contract”), and

(c)any contract under which the securities are transferred to the seller, or the seller's contract itself, is a manufactured payments contract.

(3)The seller is an excluded transferee in relation to the transfer to the seller if the nominal value of the securities subject to the seller's contract equals or exceeds that of the securities transferred to the seller.

(4)The seller is an excluded transferor in relation to the transfer of securities under the seller's contract.

(5)See section 663 (transfers without accrued interest to makers of manufactured payments) for cases where that nominal value is less than that of the securities transferred to the seller.

(6)In this section “manufactured payments contract” means a contract under which—^F1

(a)the seller is required to pay another person an amount which is representative of a periodical payment of interest on UK securities under an arrangement between them for the transfer of the securities, or^F1

(b)the seller is required to pay another person an amount which is representative of an overseas dividend on overseas securities under an arrangement between them for the transfer of the securities.^F1

(7)In this section—^F1

(a)“overseas securities” means shares, stock or other securities issued by—^F1

(i)a government, local authority or other public authority of a territory outside the United Kingdom, or^F1

(ii)another non-UK resident body of persons,^F1

and includes shares in a non-UK resident company,

(b)“overseas dividend” means any interest, dividend or other annual payment payable in respect of overseas securities, and^F1

(c)“UK securities” means securities of—^F1

(i)the government of the United Kingdom,^F1

(ii)a local authority in the United Kingdom,^F1

(iii)another public authority in the United Kingdom, or^F1

(iv)a UK resident company or other UK resident body,^F1

but does not include shares in a UK resident company.