Commentary

37 Income tax consequences of the death of a proprietor

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

37 Income tax consequences of the death of a proprietor

| Commentary

(g) Personal taxation on succession

37 Income tax consequences of the death of a proprietor

The death of a sole trader will inevitably cause the discontinuance of the sole trade. Consequently, the closing year rules will apply and there will be the possibility of a claim for terminal loss relief1. Similarly, where a partner dies, he will be treated as discontinuing the notional trade which he is treated as carrying on for tax purposes2.

The death of a company shareholder, on the other hand, does not have this effect, as it is the company not the

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