[F1462APersons leaving cash basisU.K.
(1)This section applies if—
(a)a person carrying on a trade leaves the cash basis in a chargeable period,
(b)the person has incurred expenditure at a time when [F2the cash basis applies] in relation to the trade,
(c)some or all of the expenditure was brought into account in calculating the profits of the trade on the cash basis, and
(d)the expenditure would have been qualifying expenditure if [F3the cash basis had not applied] at the time the expenditure was incurred.
(2)In this section the “relieved portion” of the expenditure is the higher of the following—
(a)the amount of that expenditure for which a deduction was allowed in calculating the profits of the trade, or
(b)the amount of that expenditure for which a deduction would have been so allowed if the expenditure had been incurred wholly and exclusively for the purposes of the trade.
(3)For the purposes of determining the person's available qualifying expenditure in the pool for the trade for the chargeable period (see section 456)—
(a)the whole of the expenditure must be allocated to the pool for the trade in that chargeable period, and
(b)the available qualifying expenditure in that pool is reduced by the relieved portion of that expenditure.
(4)For the purposes of determining any disposal values (see section 462), the expenditure incurred by the person is to be regarded as qualifying expenditure.
[F4(4A)Subsection (11)(za) of section 1A (capital allowances and charges: cash basis) applies for the purposes of this section as it applies for the purposes of that section.]
(5)For the purposes of this section a person carrying on a trade leaves the cash basis in a chargeable period if—
(a)immediately before the beginning of the chargeable period [F5the cash basis applied] in relation to the trade, and
(b)[F6the cash basis does not apply] in relation to the trade for the chargeable period.]
Textual Amendments
F1S. 462A inserted (with effect in accordance with Sch. 2 para. 64 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 2 para. 57
F2Words in s. 462A(1)(b) substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 43(2)(a), 47 (with Sch. 10 paras. 48-50)
F3Words in s. 462A(1)(d) substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 43(2)(b), 47 (with Sch. 10 paras. 48-50)
F4S. 462A(4A) inserted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 43(4), 47 (with Sch. 10 paras. 48-50)
F5Words in s. 462A(5)(a) substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 43(3)(a), 47 (with Sch. 10 paras. 48-50)
F6Words in s. 462A(5)(b) substituted (for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 43(3)(b), 47 (with Sch. 10 paras. 48-50)