B6.213 Property businesses post-cessation receipts and expenditure
In respect of UK property businesses, post-cessation receipts are subject to income or corporation tax. For income tax purposes the legislation clarifies that the charge is on the full amount received in the particular tax year and the person liable to tax is the person receiving or entitled to receive the amounts1.
However, there is no charge in respect of any post-cessation amount that is otherwise subject to income tax or corporation tax2.
Similarly, the rules for trades that allow for post-cessation expenditure to be set off against post-cessation receipts (see Division B2.8) apply equally to UK property businesses. In addition post-cessation receipts can be carried back to the date of cessation if an election is made within the normal self-assessment time limit for elections (one year after the normal filing date) for income tax purposes, and within two years of the end of the accounting period in which the receipt is received for corporation tax purposes3.
If, immediately before a person permanently ceases to carry on an unincorporated property business, the profits were calculated on the cash basis (see B6.202C) then the cash basis rules still apply for these purposes4.
Meaning of post-cessation receipt
A post-cessation receipt is a sum received after a person permanently ceases to carry on a business (here a UK property business) and the sum received relates to the previous carrying on of the business5. If, immediately before a person permanently ceases to carry on an unincorporated property business, the profits were