# Income Tax (Trading and Other Income) Act 2005, Section 248: Debts paid after cessation

Extent: E+W+S+N.I.

(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 section 96 of ITA 2007(relief for post-cessation expenditure) as 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.

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Source: https://www.legislation.gov.uk/ukpga/2005/5/section/248 (the official version)
Page: https://openlegislation.uk/income-tax-trading-and-other-income-act-2005/section-248
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.