Section 97A | Cash basis: value of trading stock on cessation of trade ^F1

(1)This section applies if—

(a)a person permanently ceases to carry on a trade in a tax year, and

(b)the cash basis applies in relation to the trade for the tax year.^F2

(2)The value of any trading stock belonging to the trade at the time of the cessation is brought into account as a receipt in calculating the profits of the trade for the tax year.

(3)The value is to be determined on a basis that is just and reasonable in all the circumstances.

(4)If there is a change in the persons carrying on a trade, subsection (2) does not apply in relation to the trade so long as a person carrying on the trade immediately before the change continues to carry it on after the change.

(5)In this section “trading stock” has the same meaning as in Chapter 12 (see section 174).

(6)This section does not apply to professions or vocations.