Taxes Consolidation Act 1997 section 91

Receipts accruing after discontinuance of trade or profession

Section 91 sets out the rules for taxing income received after a trade or profession has permanently ceased, where that income was not already accounted for during the life of the business.

• Sums arising from a trade or profession that were not taken into account before the business ceased are taxable under Schedule D Case IV as post-cessation receipts, regardless of whether accounts were prepared on an earnings or conventional basis.
• Certain sums are excluded, including foreign income of non-residents, lump sums paid to personal representatives for assigning literary or artistic copyrights, proceeds from the transfer of trading stock or work in progress at discontinuance, and income that would have qualified for the artists' exemption under section 195.
• Post-cessation expenses (other than those arising from the discontinuance itself), unrelieved losses from the former business, and unused capital allowances may be deducted against the post-cessation receipts to reduce the tax charge.
• Where a bad debt was written off and a tax deduction was obtained during the life of the business, any subsequent recovery of that debt after cessation is treated as a post-cessation receipt to the extent that the deduction was allowed.