SCHEDULES
SCHEDULE 2Transitionals and savings etc.
Part 3Trading income
Overlap profit: pre-April 1994 trades, professions and vocations
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1
This paragraph applies in the case of a trade, profession or vocation which was—
a
set up and commenced by a person before 6th April 1994, and
b
continued by the person after 5th April 1997,
and the profits of which were chargeable to income tax under Case I or II of Schedule D for the tax year 1997-98.
2
For the purposes of Chapter 15 of Part 2 “overlap profit” includes the amount of profits or gains of the basis period for the tax year 1997-98 which—
a
arose after the end of the basis period for the tax year 1996-97 or, in the case of a trade or profession carried on by a firm, the basis period of the firm for that year, and
b
arose before 6th April 1997.
3
In calculating the amount of the profits or gains of the basis period for the tax year 1997-98 which arose as mentioned above—
a
any deduction of a capital allowance, and
b
any addition of a balancing charge,
are ignored.
4
But sub-paragraph (3) does not apply in the case of a trade or profession carried on by a firm which included both an individual and a company.
5
For the purposes of this paragraph the basis period for the tax year 1996-97 is determined in accordance with paragraph 1 of Schedule 20 to FA 1994 despite the repeal by this Act of that paragraph.
6
This paragraph is subject to Schedule 22 to FA 1995 (prevention of exploitation of the transitional rules facilitating self-assessment).