Section 246 Basic meaning of “post-cessation receipt”
United Kingdom
In this Part “post-cessation receipt” means a sum—
which is received after a person permanently ceases to carry on a trade, and
which arises from the carrying on of the trade before the cessation.
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.
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.
The partner is treated for the purposes of this Chapter as permanently ceasing to carry on the trade.
Annotations
Textual amendments
- F1
Words 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)
- F2
S. 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)
- F3
Words 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)
- F4
Word 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)
- F5
S. 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)
Notes on Chapter 18
Modifications
- C1
Pt. 2 Ch. 18 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 2(3)(a)