(1)For the purposes of section 797 any reference to a disposal of a right of an individual to profits arising from a trade includes, in particular, any of events A to D.
(2)Event A is the disposal, giving up or loss by—
(a)the individual, or
(b)a firm in which the individual is a partner,
of a right arising from the trade to income (or any part of any income).
It does not matter if the right is disposed of, given up or lost as part of a larger disposal, giving up or loss.
(3)Event B is the disposal, giving up or loss of the individual's interest in a firm that carries on the trade (including the dissolution of the firm).
(4)Event C is a default in the payment of income to which—
(a)the individual, or
(b)a firm in which the individual is a partner,
has a right arising from the trade.
(5)Event D is a change in the individual's entitlement to any profits or losses arising from the trade the effect of which is that—
(a)the individual's share of any profits is reduced (including to nil), or
(b)the individual becomes entitled to a share, or a greater share, of any losses without becoming entitled to a corresponding share of profits.
(6)The changes covered by event D include cases where there is an agreement under which the individual is entitled—
(a)to a particular share of any profits or losses arising from the trade in a period (including a nil share), and
(b)to a different share of any such profits or losses in a succeeding period (including a nil share).
(7)In such cases the change in the individual's entitlement is treated for the purposes of section 797 as occurring at the beginning of the succeeding period.