Income Tax (Trading and Other Income) Act 2005

238 Spreading on ending of exemption for barristers and advocates

(1) If an individual makes a change of basis—

(a) on ceasing to take advantage of the exemption given by section 160 (barristers and advocates in early years of practice), or

(b) on that exemption coming to an end,

any adjustment income is spread over 10 tax years as follows.

(2) In each of the 9 tax years beginning with that in which the whole amount of the adjustment income would otherwise be chargeable to tax, an amount equal to—

(a) one tenth of the amount of the adjustment income, or

(b) if less, 10% of the profits of the profession of the tax year,

is treated as arising and is charged to tax.

(3) For this purpose “the profits of the profession” means the profits as calculated for the purposes of this Part leaving out of account any allowances or charges under CAA 2001.

(4) In the tenth tax year the balance of the adjustment income is treated as arising and is charged to tax.

(5) If, before the whole of the adjustment income has been charged to tax, the individual permanently ceases to carry on the profession, this section continues to apply but with the omission of the alternative limit in subsection (2)(b).

(6) This section is subject to any election under section 239 (election to accelerate charge).