Finance Act 2002

Giving effect to positive adjustment

4 (1) If the amount of the adjustment is positive, it is chargeable to tax.

(2) An amount so chargeable to income tax—

(a) is treated as income arising on the last day of the first period of account for which the new basis is adopted;

(b) is chargeable under Case VI of Schedule D;

(c) in the case of an individual whose income from the trade, profession or vocation in question is—

(i) relevant earnings within section 623(2)(c) or 644(2)(c) of the Taxes Act 1988, or

(ii) earned income within section 833(4)(c) of that Act,

is similarly relevant earnings or earned income for the tax year in which it is charged to tax; and

(d) is treated for the purposes of Chapters 1 and 2 of Part 10 of the Taxes Act 1988 (loss relief) as profits of the trade, profession or vocation for the chargeable period for which it is charged to tax.

(3) An amount so chargeable to corporation tax is treated as a receipt of the trade, profession or vocation arising on the last day of the first period of account for which the new basis is adopted.