Part 2Trading income
Chapter 18Post-cessation receipts
Meaning of “post-cessation receipts”
246Basic meaning of “post-cessation receipt”
(1)
In this Part “post-cessation receipt” means a sum—
(a)
which is received after a person permanently ceases to carry on a trade, and
(b)
which arises from the carrying on of the trade before the cessation.
(2)
For this purpose the reference to a person permanently ceasing to carry on a trade includes F1a reference to a company ceasing to be within the charge to corporation tax in respect of a trade.
F2(2A)
If, immediately before a person permanently ceases to carry on a trade, F3the cash basis applies in relation to the trade, a sum is to be treated as a post-cessation receipt only if it would have been brought into account in calculating the profits of the trade on the cash basis had it been received at that time.
(3)
Subsection (4) applies if—
(a)
a firm carries on a trade, F4and
(b)
a person ceases to be a partner in the firm, F5...
F5(c)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)
The partner is treated for the purposes of this Chapter as permanently ceasing to carry on the trade.