PART IV PROVISIONS RELATING TO THE SCHEDULE D CHARGE
CHAPTER VI DISCONTINUANCE, AND CHANGE OF BASIS OF COMPUTATION
Valuation of trading stock etc.
100 Valuation of trading stock at discontinuance of trade.
C11
M1In computing for any tax purpose the profits or gains of a trade which has been discontinued, any trading stock belonging to the trade at the discontinuance shall be valued as follows—
a
if—
i
the stock is sold or transferred for valuable consideration to a person who carries on, or intends to carry on, a trade in the United Kingdom, and
ii
the cost of the stock may be deducted by the purchaser as an expense in computing for any tax purpose the profits or gains of that trade,
the value of the stock shall be taken to be the amount realised on the sale or the value of the consideration given for the transfer; and
b
if the stock does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which it would have realised if it had been sold in the open market at the discontinuance of the trade.
2
M2For the purposes of this section “trading stock”, in relation to any trade—
a
means property of any description, whether real or personal, being either—
i
property such as is sold in the ordinary course of the trade, or would be so sold if it were mature or if its manufacture, preparation or construction were complete; or
ii
materials such as are used in the manufacture, preparation or construction of any such property as is referred to in sub-paragraph (i) above; and
b
includes also any services, article or material which would, if the trade were a profession or vocation, be treated, for the purposes of section 101, as work in progress of the profession or vocation, and references to the sale or transfer of trading stock shall be construed accordingly.