Section 661 | Successive transfers with unrealised interest in default

(1)The amount taken as the unrealised interest value for the purposes of section 660(2) or (3) is reduced if the person (“T”) who makes the transfer referred to in section 660(1) also acquired the securities with the right to receive unrealised interest.

(2)The amount of the reduction depends on whether subsection (3) applies.

(3)This subsection applies if—

(a)T has received, as transferee, some or all of that unrealised interest, and

(b)T is liable for income tax on it for the tax year in which it was received.

(4)If subsection (3) applies, the reduction is equal to the value on the day of the transfer to T of the right to receive the unrealised interest (“the earlier value”) less the total so received.

(5)If subsection (3) does not apply, the reduction is equal to the earlier value.

(6)But if the reduction under subsection (4) or (5) exceeds the amount mentioned in subsection (1), that amount is treated as reduced to nil.