Commentary

B2.804 Basic meaning of post-cessation receipt

Business tax
Business tax | Commentary

B2.804 Basic meaning of post-cessation receipt

Business tax | Commentary

B2.804 Basic meaning of post-cessation receipt

A post-cessation receipt is income received after a trade has been permanently discontinued1, and which arises from the carrying on of that trade before the discontinuance2.

If, immediately before a person permanently ceases to carry on a trade, a cash basis election has effect for that trade (see B2.112), a sum is only treated as taxable if it would have been brought into account in calculating the profits of the trade on a cash basis if it had been received at that time3.

A company is treated as ceasing to carry on a trade when it ceases to be within the charge to corporation tax in respect of that trade4.

Where a partner leaves a partnership

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