Commentary

B2.803 Charge to tax on post-cessation receipts

Business tax
Business tax | Commentary

B2.803 Charge to tax on post-cessation receipts

Business tax | Commentary

B2.803 Charge to tax on post-cessation receipts

Income tax or corporation tax is chargeable on receipts which are derived from a trade1 even where they are not received until after the trade has ceased. The so called post-cessation receipts are charged to tax separately from the profits of the trade, although they are taxable as trading income and only to the extent that they are not otherwise chargeable to income or corporation tax2. Thus, if the receipt is brought into account in calculating the profits of the trade for any period, it is not taxable as a post-cessation receipt3.

Trading

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