Thanks Maru - however, it seems like making the ground colour black is the only way to get rid of it completely. The downside to this is that it changes the sky colour completely. I do expect there to be some level of reflective gradient due to the angle, but it shouldn't be that harsh.
Disabling autobump makes it feel a little bit more natural, as does reducing the refraction below 1. Which I guess the ocean isn't 100% refractive right? Scum, dirt, silt, particles of whatever nature would stop it being perfectly refractive. But there will be times where perhaps you see the horizon and you want refraction at 1?
Also the closer to the horizon the sun gets, the more the harsh cutoff disappears.
It's just the harshness of the where the band starts that's odd. Absorption also affects it.
So i think it's definitely Refraction related and autobump was perhaps making it even more abrupt?
It would still be good to find out exactly what's causing it because I've not seen this happen with VRay in any tutorials i've watched but I could be wrong.