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Income Tax (Trading and Other Income) Act 2005

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Changes over time for: Cross Heading: Cash basis: value of stock and work in progress on cessation

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Changes to legislation:

There are currently no known outstanding effects for the Income Tax (Trading and Other Income) Act 2005, Cross Heading: Cash basis: value of stock and work in progress on cessation. Help about Changes to Legislation

[F1Cash basis: value of stock and work in progress on cessationU.K.

Textual Amendments

F1Ss. 97A, 97B and cross-heading inserted (with effect in accordance with Sch. 4 paras. 56, 57 of the amending Act) by Finance Act 2013 (c. 29), Sch. 4 para. 21

97ACash basis: value of trading stock on cessation of tradeU.K.

(1)This section applies if—

(a)a person permanently ceases to carry on a trade in a tax year, and

(b)[F2the cash basis applies] in relation to the trade for the tax year.

(2)The value of any trading stock belonging to the trade at the time of the cessation is brought into account as a receipt in calculating the profits of the trade for the tax year.

(3)The value is to be determined on a basis that is just and reasonable in all the circumstances.

(4)If there is a change in the persons carrying on a trade, subsection (2) does not apply in relation to the trade so long as a person carrying on the trade immediately before the change continues to carry it on after the change.

(5)In this section “trading stock” has the same meaning as in Chapter 12 (see section 174).

(6)This section does not apply to professions or vocations.

Textual Amendments

F2Words in s. 97A(1)(b) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 23, 47 (with Sch. 10 paras. 48-50)

97BCash basis: value of work in progress on cessation of profession or vocationU.K.

(1)This section applies if—

(a)a person permanently ceases to carry on a profession or vocation in a tax year, and

(b)[F3the cash basis applies] in relation to the profession or vocation for the tax year.

(2)The value of any work in progress at the time of the cessation is brought into account as a receipt in calculating the profits of the profession or vocation for the tax year.

(3)The value is to be determined on a basis that is just and reasonable in all the circumstances.

(4)If there is a change in the persons carrying on a profession, subsection (2) does not apply in relation to the profession so long as a person carrying on the profession immediately before the change continues to carry it on after the change.

(5)In this section “work in progress” has the same meaning as in Chapter 12 (see section 183).]

Textual Amendments

F3Words in s. 97B(1)(b) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 24, 47 (with Sch. 10 paras. 48-50)

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