Taxes Consolidation Act 1997 section 749

Dealers in securities

Section 749 provides that where the first buyer is a dealer in securities, the purchase price of any securities acquired is reduced by the interest element contained within that price, thereby preventing the creation of artificial trading losses from buying securities cum dividend and selling them ex dividend.

• Where a security dealer buys securities cum dividend and sells them ex dividend, the purchase price is reduced by the accrued interest element (calculated under Schedule 21), preventing an artificial trading loss.
• The reduction does not apply to bona fide discount houses or recognised stock exchange dealers acting in the ordinary course of business, nor to dealers in overseas securities or Irish Government securities where the interest is fully taxed as trading income.
• A dealer in overseas securities may avoid the reduction by electing in writing (by the return filing date) to disclaim any entitlement to double tax credit for foreign tax on the interest; this election applies only for the chargeable period in which it is made.
• The section does not apply where the interest is already caught by the anti-dividend stripping rules in section 752, ensuring there is no double charge on the same transaction.