Meaning of “post-cessation receipts”U.K.
246Basic meaning of “post-cessation receipt”U.K.
(1)In this Part “post-cessation receipt” means a sum—
(a)which is received after a person permanently ceases to carry on a trade, and
(b)which arises from the carrying on of the trade before the cessation.
(2)For this purpose the reference to a person permanently ceasing to carry on a trade includes [F1a reference to a company ceasing to be within the charge to corporation tax in respect of a trade.]
[F2(2A)If, immediately before a person permanently ceases to carry on a trade, [F3the cash basis applies] in relation to the trade, a sum is to be treated as a post-cessation receipt only if it would have been brought into account in calculating the profits of the trade on the cash basis had it been received at that time.]
(3)Subsection (4) applies if—
(a)a firm carries on a trade, [F4and]
(b)a person ceases to be a partner in the firm, F5...
F5(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)The partner is treated for the purposes of this Chapter as permanently ceasing to carry on the trade.
Textual Amendments
F1Words in s. 246(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 612 (with Sch. 2 Pts. 1, 2)
F2S. 246(2A) inserted (with effect in accordance with Sch. 4 paras. 56, 57 of the amending Act) by Finance Act 2013 (c. 29), Sch. 4 para. 39(2)
F3Words in s. 246(2A) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 29, 47 (with Sch. 10 paras. 48-50)
F4Word in s. 246(3)(a) inserted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2022 (c. 3), Sch. 1 paras. 19(a), 61(1)
F5S. 246(3)(c) and word omitted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by virtue of Finance Act 2022 (c. 3), Sch. 1 paras. 19(b), 61(1)
247Other rules about what counts as post-cessation receiptsU.K.
(1)The following provisions treat certain amounts as post-cessation receipts for the purposes of this Part—
section 82(6) (contributions to local enterprise organisations or urban regeneration companies),
section 104(3) (distribution of assets of mutual concerns),
section 109(2) (receipt by donor or connected person of benefit attributable to certain gifts),
section 185(1) (election for valuation at cost),
section 248 (debts paid after cessation),
section 249 (debts released after cessation), as qualified, where appropriate, by section 48(4) (car F6... hire),
section 250 (receipts relating to post-cessation expenditure),
section 251 (transfer of rights if transferee does not carry on trade), and
section 844 (income charged on withdrawal of relief after source ceases: unremittable income).
(2)Section 98 (acquisition of trade: receipts from transferor's trade) and section 251 (transfer of rights if transferee does not carry on trade) treat certain amounts as not being post-cessation receipts for the purposes of this Part.
Textual Amendments
F6Words in s. 247(1) omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 40