Where securities are transferred with a right to receive interest which was payable (but not paid) on an interest payment day falling before the settlement day, such interest is referred to as ‘unrealised interest’ (ITA 2007, s. 625).

Where there is a transfer with unrealised interest and the settlement day falls after the end of the only or last interest period, the transferor is treated as making accrued income profits (ITA 2007, s. 630) unless they are an excluded transferor (ITA 2007, s. 638(3)).

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