Textual Amendments
F1Pt. 2 Ch. 6A inserted (with effect in accordance with Sch. 4 paras. 56, 57 of the amending Act) by Finance Act 2013 (c. 29), Sch. 4 para. 23
The provisions of this Chapter apply to professions and vocations as they apply to trades.
This Chapter applies in calculating the profits of a person's trade for a period on the cash basis.
(1)This section applies if—
(a)the person does anything in relation to the trade (“the relevant act”),
(b)there is a difference between—
(i)the amount (if any) that, as a result of the relevant act, would (apart from this section) be brought into account in calculating the profits of the trade for the period, and
(ii)the amount (if any) that would have been so brought into account had the relevant act consisted of a transaction between the person and another person dealing with each other at arm's length in the open market (“the arm's length amount”), and
(c)the profits of the trade for the period are less than they would have been if the arm's length amount had been so brought into account.
(2)The amount to be brought into account in calculating the profits of the trade for the period is an amount that is just and reasonable in all the circumstances.
Section 106C does not apply in relation to the relevant act if subsection (4) or (5) of section 96A [F2(capital receipts under, or after leaving, cash basis)] applies in relation to that act.
Textual Amendments
F2Words in s. 106D substituted (16.11.2017) (with effect in accordance with Sch. 2 para. 64 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 2 para. 6
Section 106C does not apply in relation to the relevant act if any of the provisions of Chapter 7 (trade profits: gifts to charities etc) applies in relation to that act.]