Finance (No. 2) Act 1992

3 (1) Tax shall be charged [F1 (in the case of corporation tax, under Case VI of Schedule D)] in respect of any sums within sub-paragraph (2) below that are received by the company or its liquidator after— U.K.

(a) the commencement of the winding-up proceedings, or

(b) the discontinuance of the relevant trade,

whichever was the later.

(2) Subject to sub-paragraph (3) below, any sum arising from the carrying on of the relevant trade is within this sub-paragraph, in so far as its value was not brought into account in computing the profits or gains of the trade for any period before the discontinuance.

(3) The following are not within sub-paragraph (2) above—

(a) any sum received on behalf of a person who is entitled to it to the exclusion of the company and its liquidator;

(b) any sum realised by the transfer of an asset required to be valued under section 100 of the Taxes Act 1988 [F2 or section 173 of the Income Tax (Trading and Other Income) Act 2005] (valuation of trading stock at discontinuance);

F3 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Where tax is chargeable in respect of any sum by virtue of this paragraph, any other provision charging that sum to tax shall not apply.

[F4 (5) This paragraph and paragraph 4 below have effect for the purposes of corporation tax notwithstanding anything in section 80(5) of the Finance Act 1996 (matters to be brought into account in the case of loan relationships only under Chapter 2 of Part 4 of that Act).]

Textual Amendments

F1 Words in Sch. 12 para. 3(1) substituted (30.3.2006) (with effect in accordance with art. 1(3)(4) of the amending S.I.) by The Income Tax (Trading and Other Income) Act 2005 (Consequential Amendments) Order 2006 (S.I. 2006/959), arts. 1(2), 4(2)

F2 Words in Sch. 12 para. 3(3)(b) inserted (30.3.2006) (with effect in accordance with art. 1(3)(4) of the amending S.I.) by The Income Tax (Trading and Other Income) Act 2005 (Consequential Amendments) Order 2006 (S.I. 2006/959), arts. 1(2), 4(3)

F3 Sch. 12 para. 3(3)(c) repealed (24.7.2002 with effect as mentioned in s. 107(5) of the amending Act) by 2002 c. 23, ss. 107(2), 141, Sch. 40 Pt. 3(18)

F4 Sch. 12 para. 3(5) inserted (24.7.2002 with effect as mentioned in s. 107(5) of the amending Act) by 2002 c. 23, s. 107(3)