Commentary

D9.426 Variable-rate securities

Corporate tax
Corporate tax | Commentary

D9.426 Variable-rate securities

Corporate tax | Commentary

D9.426 Variable-rate securities

Without special provisions, it would be possible to avoid effective application of the accrued income scheme legislation by the issue of securities with widely varying rates of interest over the period between issue and redemption. For example, they might carry an interest rate for the first two years at two per cent, for the next two years at 20% and at 10% thereafter. Thus a sale cum-div shortly before the end of the second year would result in a charge on the vendor (based on a two per cent interest payment) of a very small AIP (see D9.420) whereas the value of the securities is enhanced by the

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