101 Valuation of work in progress at discontinuance of profession or vocation.U.K.
(1)M1Where, in computing for [F1any corporation tax purpose] the [F2profits] of a profession F3. . . which has been discontinued, a valuation is taken of the work of the profession F3. . . in progress at the discontinuance, that work shall be valued as follows—
(a)if—
(i)the work is transferred for money or any other valuable consideration to a person who carries on, or intends to carry on, a profession F3. . . in the United Kingdom, and
(ii)the cost of the work may be deducted by that person as an expense in computing for any tax purpose the [F2profits] of that profession F3. . . ,
the value of the work shall be taken to be the amount paid or other consideration given for the transfer; and
(b)if the work does not fall to be valued under paragraph (a) above, its value shall be taken to be the amount which would have been paid for a transfer of the work on the date of the discontinuance as between parties at arm’s length.
(2)M2Where a profession F4. . . is discontinued, and the [F5company by which] it was carried on immediately before the discontinuance so elects by notice sent to the inspector at any time within [F6the period specified in subsection (2A) below]—
(a)the amount (if any) by which the value of the work in progress at the discontinuance (as ascertained under subsection (1) above) exceeds the actual cost of the work shall not be brought into account in computing the [F2profits] of the period immediately before the discontinuance; but
(b)the amount by which any sums received for the transfer of the work exceed the actual cost of the work shall be included in the sums chargeable to tax by virtue of section 103 as if it were a sum to which that section applies received after the discontinuance.
[F7(2A)The period mentioned in subsection (2) above is—
(a)F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)F9. . . the period of two years beginning at the end of the accounting period in which the profession F9. . . is discontinued.]
(3)M3References in this section to work in progress at the discontinuance of a profession F10. . . shall be construed as references to—
(a)any services performed in the ordinary course of the profession F10. . . , the performance of which was wholly or partly completed at the time of the discontinuance and for which it would be reasonable to expect that a charge would have been made on their completion if the profession F10. . . had not been discontinued; and
(b)any article produced, and any such material as is used, in the performance of any such services,
and references in this section to the transfer of work in progress shall include references to the transfer of any benefits and rights which accrue, or might reasonably be expected to accrue, from the carrying out of the work.
Textual Amendments
F1Words in s. 101(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 80(2)(a) (with Sch. 2)
F2Words in s. 101(1)(2)(a) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1
F3Words in s. 101(1) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 80(2)(b), Sch. 3 (with Sch. 2)
F4Words in s. 101(2) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 80(3), Sch. 3 (with Sch. 2)
F5Words in s. 101(2) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 80(3) (with Sch. 2)
F6Words in s. 101(2) substituted (with effect in accordance with s. 135(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 21 para. 3(2)
F7S. 101(2A) inserted (with effect in accordance with s. 135(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 21 para. 3(3)
F8S. 101(2A)(a) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 80(4)(a), Sch. 3 (with Sch. 2)
F9Words in s. 101(2A)(b) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 80(4)(b), Sch. 3 (with Sch. 2)
F10Words in s. 101(3) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 80(5), Sch. 3 (with Sch. 2)
Marginal Citations
M1Source—1970 s.138(1)
M2Source—1970 s.138(3)
M3Source—1970 s.138(5)