Part 3 U.K. Trading income

Modifications etc. (not altering text)

C1 Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)

Chapter 11 U.K. Trade profits: valuation of stock on cessation of trade

166 Sale basis of valuation: sale to connected person U.K.

(1) The value of trading stock is determined in accordance with this section if—

(a) it is sold to a person who carries on, or intends to carry on, a trade, profession or vocation in the United Kingdom and is entitled to deduct the cost of the stock as an expense in calculating the profits of that trade, profession or vocation for corporation or income tax purposes,

(b) the buyer is connected with the seller, and

(c) no election is made under section 167 (election by connected persons).

(2) The value is taken to be the amount which would have been realised if the sale had been between independent persons dealing at arm's length.