[66APersons leaving cash basisU.K.
This section has no associated Explanatory Notes
[(1)This section applies if—
(a)a person carrying on a trade, profession, vocation or property business (“the business”) leaves the cash basis in a chargeable period,
(b)the person has incurred expenditure at a time when the profits of the business are calculated on the cash basis,
(c)some or all of the expenditure was brought into account in calculating the profits of the business on the cash basis, and
(d)the expenditure would have been qualifying expenditure if the profits of the business had not been calculated on the cash basis at the time the expenditure was incurred.]
(2)In this section—
(a)the “relieved portion” of the expenditure is the [higher of the following]—
(i)[the amount of that expenditure for which] a deduction was allowed in calculating the profits of the trade, profession[, vocation or property business], or
(ii)[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, profession[, vocation or property business];
(b)the “unrelieved portion” of the expenditure is any remaining amount of the expenditure.
(3)For the purposes of determining any entitlement of the person to an annual investment allowance or a first-year allowance, the person is to be treated as incurring the unrelieved portion of the expenditure in the chargeable period.
(4)For the purposes of determining the person's available qualifying expenditure in a pool for the chargeable period (see section 58)—
(a)the whole of the expenditure must be allocated to the appropriate pool (or pools) in that chargeable period, and
(b)the available qualifying expenditure in a pool to which the expenditure (or some of it) is allocated is reduced by the relieved portion of that expenditure.
(5)For the purposes of determining any disposal receipts (see section 60), the expenditure incurred by the person is to be regarded as qualifying expenditure.
(6)For the purposes of this section a person carrying on a trade, profession or vocation leaves the cash basis in a chargeable period if—
(a)immediately before the beginning of the chargeable period [the cash basis applied] in relation to the trade, profession or vocation, and
(b)[the cash basis does not apply] in relation to the trade, profession or vocation for the chargeable period.
[(7)For the purposes of this section a person carrying on a property business leaves the cash basis in a chargeable period (“tax year X”) if the profits of the business are calculated—
(a)in accordance with GAAP (see section 271B of ITTOIA 2005) for tax year X, and
(b)on the cash basis (see section 271D of that Act) for the previous tax year.
(8)Subsection (11) 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.]]