Part 2Trading income
C1Chapter 18Post-cessation receipts
Meaning of “post-cessation receipts”
246Basic meaning of “post-cessation receipt”
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.
F22A
If, immediately before a person permanently ceases to carry on a trade, an election under section 25A (cash basis for small businesses) has effect 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,
b
a person ceases to be a partner in the firm, and
c
the departure results in the partner permanently ceasing to carry on the notional trade (see section 852).
4
The partner is treated for the purposes of this Chapter as permanently ceasing to carry on the trade.
Pt. 2 Ch. 18 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 2(3)(a)