In the United Kingdom, a way that
interest on
bonds is treated for tax purposes. Specifically, when a
bondholder sells a bond, all
interest that has accumulated since the last
coupon payment but has not yet been paid is treated as if it had been paid to the bondholder. For example, suppose a bond pays coupons on June 30 and December 31. If one sells a bond on August 15, all interest accumulating between June 30 and August 15 is treated as income for the seller and is taxed as such, even though the interest is actually paid to the
buyer.