Part 2Trading income
Chapter 17Adjustment income
Treatment of adjustment income and adjustment expense
C1232Treatment of adjustment income
1
Adjustment income is treated as arising on the last day of the first period of account for which the new basis is adopted.
2
But this is subject to sections 235 (cases where adjustment not required until assets realised or written off) and 236 (change from realisation basis to mark to market).
3
Adjustment income is treated for the purposes of Chapter 1 of Part 10 of ICTA (loss relief) as profits of the trade for the tax year in which tax is charged on it.
4
In the case of an individual whose income from the trade is—
a
earned income within section 833(4)(c) of ICTA, or
b
relevant UK earnings within section 189(2)(b) of FA 2004,
adjustment income is similarly earned income or relevant UK earnings.