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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Securities: Accrued Income Scheme: transfer without accrued interest

For Capital Gains Tax purposes the following adjustments are required.

  • Transferor - the disposal proceeds are increased by the value of the rebate amount
  • Transferee - the acquisition cost is increased by the value of the rebate amount.


  • 1 January 1989 Mr Bates buys £100,000 UK Computer PLC 10 per cent convertible loan stock for £108,000. Interest is payable on 1 January and 1 July.
  • 22 June 1990 Mr Bates sells the loan stock at a `clean price’, see IM4235, of £106,000.
  • Mr Bates has to compensate the purchaser for the loss of nine days’ interest, £247.
  • The Accrued Income Scheme gives Mr Bates relief for a rebate amount of £247.

Capital Gains Tax computation

Disposal proceeds 105,753
plus Rebate Amount* 247
less Cost 108,000
Unindexed loss (2,000)
less Indexation** 14,946
Allowable loss (16,946)
  • TCGA92/S119 (3)(a)

** January 1989-June 1990 - 0.141

The purchaser will have made a net payment of £105,753. The rebate amount of £247 will be taxed under the Accrued Income Scheme. For Capital Gains Tax purposes the acquisition cost becomes £106,000. Indexation allowance is given on £106,000.

NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. Companies and other concerns within the charge to Corporation Tax are not affected by these changes. For indexation allowance see CG17207+ and for taper relief see CG17895+.