http://www.legislation.gov.uk/ukpga/2005/5/section/205/notesIncome taxTaxLegal servicesLegislationIncomeExplanatory Notes to Income Tax (Trading and Other Income) Act 2005Inland RevenueKing's Printer of Acts of Parliament2020-04-20
<Citation URI="http://www.legislation.gov.uk/id/ukpga/2005/5" id="c00001" Class="UnitedKingdomPublicGeneralAct" Year="2005" Number="0005">Income Tax (Trading and Other Income) Act 2005</Citation>
5
24 March 2005
Commentary on Sections<CitationSubRef id="c00045" URI="http://www.legislation.gov.uk/id/ukpga/2005/5/part/2" CitationRef="c00001" SectionRef="part-2">Part 2</CitationSubRef>: Trading income<CitationSubRef id="c01111" URI="http://www.legislation.gov.uk/id/ukpga/2005/5/part/2/chapter/15" CitationRef="c00045" SectionRef="part-2-chapter-15">Chapter 15</CitationSubRef>: Basis periods
<CitationSubRef id="c01151" URI="http://www.legislation.gov.uk/id/ukpga/2005/5/section/205" CitationRef="c00001" SectionRef="section-205">Section 205</CitationSubRef>: Deduction for overlap profit in final tax year
837
This section provides the authority for deducting overlap profit in what is probably the more common of the two cases where it may be deducted: in calculating the profits of the final year of trading. (The other, on certain changes of accounting date, is dealt with in section 220.) It is based on section 63A(3) of ICTA.
838
This adjustment is a key part of the rules which ensure that, over the lifetime of a trade, the total profits assessed exactly equal the total profits earned.