| Commentary

240.1 Trading profits and losses

| Commentary

5: TAX CONSEQUENCES OF THE SALE

240 The seller

240.1 Trading profits and losses

Where the seller is a sole trader or a partnership, the sale of the business will obviously lead to the discontinuance of the existing trade and so the closing-year rules will apply1. In the last tax year of the business, broadly a sole trader or partner will be taxed on the trading profits of the business, or his share of them, from the end of the last taxed accounting period to the date of discontinuance, less any overlap profit2. In the case of a company, any profits or

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