Modifications etc. (not altering text)
C1Pt. 2 Ch. 18 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 2(3)(a)
(1)Subsection (2) applies if, in calculating the profits of a trade for income or corporation tax purposes, a deduction is made in respect of a debt under—
(a)section 35 (bad and doubtful debts), or
(b)section 74(1)(j) of ICTA (corresponding corporation tax provision),
and a person permanently ceases to carry on the trade.
(2)A sum received after the cessation is treated as a post-cessation receipt so far as the deduction is made.
(3)Subsection (4) applies if relief is given under [F1section 96 of ITA 2007](relief for post-cessation expenditure) [F2as a result of subsection (1)(b) of that section] in respect of a debt owed to a person who has permanently ceased to carry on a trade.
(4)A sum received by the person in payment of the debt is treated as a post-cessation receipt so far as relief is given in respect of the sum.
Textual Amendments
F1Words in s. 248(3) substituted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 503(a)
F2Words in s. 248(3) inserted (6.4.2007 with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 503(b)