Part 2Trading income

C1Chapter 18Post-cessation receipts

Annotations:
Modifications etc. (not altering text)
C1

Pt. 2 Ch. 18 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 2(3)(a)

Sums treated as post-cessation receipts

248Debts paid after cessation

1

Subsection (2) applies if, in calculating the profits of a trade for income or corporation tax purposes, a deduction is made in respect of a debt under—

a

section 35 (bad and doubtful debts), or

b

section 74(1)(j) of ICTA (corresponding corporation tax provision),

and a person permanently ceases to carry on the trade.

2

A sum received after the cessation is treated as a post-cessation receipt so far as the deduction is made.

3

Subsection (4) applies if relief is given under F1section 96 of ITA 2007(relief for post-cessation expenditure) F2as a result of subsection (1)(b) of that section in respect of a debt owed to a person who has permanently ceased to carry on a trade.

4

A sum received by the person in payment of the debt is treated as a post-cessation receipt so far as relief is given in respect of the sum.