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Income Tax (Trading and Other Income) Act 2005

Section 180: Cost to buyer of stock valued on sale basis of valuation

742.This section sets out the rule for the buyer of the stock. It is based on section 100(1E) of ICTA. In a “sale basis” case, any value given to the trading stock of the taxpayer whose trade has ceased is also used to calculate the profits of the buyer of the stock.

743.Section 100(1A) to (1C) of ICTA continue to apply for corporation tax. So the reference to those subsections is retained to cater for the case where the stock is acquired from a person liable to corporation tax. In the reverse case, where the stock is transferred from a person liable to income tax to a person liable to corporation tax, the valuation is made in accordance with this Chapter. The consequential amendments to section 100 of ICTA produce the right result for corporation tax (see paragraph 79 of Schedule 1 to this Act).

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