Taxes Consolidation Act 1997 section 748

Interpretation and application (Chapter 1)

Section 748 sets out definitions and the scope of the anti-avoidance rules in Chapter 1 (and Schedule 21) dealing with the purchase and sale of securities where the effect is that the buyer receives interest or a distribution on the securities.

• Defines key terms including "interest" (which covers distributions and dividends), "securities" (which includes stocks and shares), and "person" (which includes bodies of persons and trustees of exempt funds).
• The rules apply where a person (the "first buyer") buys securities, later sells them, and receives interest that became payable on the securities in the interim — a practice commonly known as bond washing.
• The rules do not apply where more than six months elapses between purchase and disposal, or more than one month elapses and the Revenue Commissioners are satisfied the transactions were at market value with no pre-arranged sale.
• A sale of similar securities is treated as a sale of the originally purchased securities (on a last-in, first-out basis), and where a trade commences or its participants change, securities are deemed sold and reacquired at open market value.