BIM90125 | Post-cessation receipts and expenses: post-cessation trade relief: interaction with relief for liabilities of a former employment

From HM Revenue & Customs · Business Income Manual

Where relief is available for liabilities of a former employment in the same tax year as relief is available under post-cessation trade relief, the former takes priority

Relief may be available for certain liabilities incurred by employees after cessation of their employment. See S-S Income Tax (Earnings and Pensions) Act 2003 () and onwards.

Where, in the same year, a person has claims to relief both for post-cessation trade relief (see ) and for relief in respect of liabilities of a former employment under , the relief under takes priority.

This is because if the claimant has insufficient other income in the year to cover the allowable expenditure of that year, the excess relief is lost. However, expenditure which qualifies under may be relievable by setting against chargeable gains (see ) or by carrying the expenditure forward to set against post-cessation receipts from the same trade (see ).