Taxes Consolidation Act 1997 section 751

Traders other than dealers in securities

Section 751 ensures that anti-avoidance measures targeting "cum div" and "ex div" dealings in securities extend to traders and companies that are not financial dealers.

• Where an ordinary trader (not a securities dealer) buys a security cum dividend and sells it ex dividend, any artificial loss is neutralised by disregarding the accrued interest element of the purchase price and any tax paid on it when calculating loss relief entitlements.
• For income tax purposes, the accrued interest amount (determined under Schedule 21) and related tax are excluded from the loss relief computation under section 381.
• For corporation tax purposes, the same accrued interest amount is excluded when identifying the income or profits against which a trading loss may be set off under section 396.
• Where a company that is not a securities dealer, or whose business consists mainly of making investments, makes annual payments partly out of accrued interest, those payments are treated as not paid from taxed income and are not regarded as charges on income for corporation tax.