Section 871 | Apportionment etc. of miscellaneous profits to tax year

(1)This section applies if—

(a)income is chargeable to income tax under or by virtue of any provision to which section 1016 of ITA 2007 applies, and^F1

(b)any period for which the accounts are drawn up (a “period of account”) does not coincide with a tax year.

(2)For this purpose the reference to any provision to which section 1016 of ITA 2007 applies is to be read as if subsection (3)(a) of that section were omitted (exclusion for relevant foreign income charged under this Act).^F2F3

(3)Any of the following steps may be taken if they are necessary in order to arrive at the profits or losses of the tax year—

(a)apportioning the profits or losses of a period of account to the parts of that period falling in different tax years, and

(b)adding the profits or losses of a period of account (or part of a period) to profits or losses of other periods of account (or parts).

(4)The steps must be taken by reference to the number of days in the periods concerned.

(5)But the person to whom the profits or losses arise may use a different way of measuring the length of the periods concerned if—

(a)it is reasonable to do so, and

(b)the way of measuring the length of periods is used consistently for the purpose of charging to income tax the income in question.