Taxes Consolidation Act 1997 section 67

Section 67 sets out the income tax assessment rules that apply when a trade or profession is permanently discontinued, including the treatment of the final and penultimate years of assessment and cases where cessation arises on death.

• In the final year of trading, the tax assessment is based on the actual profits from 1 January to the date of cessation, with any unutilised losses carried forward under section 382 deducted from those profits.
• If the actual profits of the penultimate year (the calendar year before the year of cessation) exceed the amount originally assessed for that year under the normal basis period rules, the assessment for that year is revised upwards to the actual profit figure.
• Where a trader dies, any income tax that would have been chargeable is assessed on the deceased person's executors or administrators, and becomes a debt payable out of the estate.
• A trade or profession is treated as having permanently ceased on the date of the trader's death, even if the business continues to be carried on by another person.