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HMRC internal manual

Savings and Investment Manual

HM Revenue & Customs
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Accrued Income Scheme: other excluded persons

Financial traders

ITA07/S642 excludes a transfer of securities by or to a person carrying on a trade, where the proceeds will be taken into account in computing trading profits. In effect, therefore, financial traders are excluded from the AIS. This exception does not apply to the counterparty in either case.


See SAIM4230.

Individuals to whom the remittance basis applies before 6 April 2008

ITA07/S644 provided that individuals were excluded transferors and transferees in respect of transfers to and from them of foreign securities in circumstances where, if interest arose on the securities, any tax liability on the interest would be relevant foreign income charged on the remittance basis, rather than the normal arising basis. These were non-domiciled individuals and not ordinarily resident Commonwealth citizens or citizens of the Irish Republic. FA08 withdrew this exclusion for transfers of securities where the settlement day is on or after 6 April 2008.

The interaction between the AIS and the remittance basis rules is complicated. See SAIM4380.


ITA07/S645 provides that a person is an excluded transferor or transferee if any interest received by them is applied for charitable purposes and they are exempt from tax on savings and investment income under ITA07/S532 as a charitable trust, or exempt in respect of public revenue dividends applicable for the repair of college or church buildings etc. under ITA07/S533.

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Registered pension schemes

ITA07/S646 excludes transfers to and from a person where the person is entitled to the exemption for income from investments held for the purposes of a registered pension scheme under FA04/S186.

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Makers of manufactured payments

ITA07/S647 is concerned with the interaction between the Accrued Income Scheme and the rules on ‘manufactured interest’ and ‘manufactured overseas dividends’ in ITA07/Part 11ZA. Broadly it ensures that the AIS does not give rise to a double charge on transactions which are already caught by the rules on manufactured payments. It excludes the seller in such contracts from being a transferor, and from being a transferee to the extent that the seller has contracted to sell more securities than have been transferred to him.

Where a payment is treated as made by a transferor to the maker of the manufactured payment (the transferee), ITA07/S663 treats the amount of the payment as reduced to the extent that the maker of the manufactured payment has already contracted to sell securities of that kind. This ensures that there is no double charge to tax under both the AIS and the rules on manufactured payments and repos in Part 11ZA of ITA07.