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Accrued income scheme

This topic has 1 reply, 2 voices, and was last updated 8 years ago by Tax Tutor.

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February 10, 2018 at 10:42 pm #436291
mjibola
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In the notes in accrued income scheme, why is the purchaser receiving 6/12 of the interest of the security?
He bought it in Dec 1st.. shouldn’t that be Dec 1st to 30th June 2017 for the payment? 7/12 instead?
February 12, 2018 at 8:36 am #436534
Tax Tutor
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No – the payment is made every 6 months and will go to whoever owns the security at that date – that is why the value of the security is higher closer to the interest receipt date, which in turn is exactly the reason for the accrued income scheme!
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