Section 186 | Election for spreading if section 185 applies

(1)If section 185 applies, the company carrying on the trade may elect for any receipt treated as arising under this Chapter to be spread over 6 periods of account.

(2)The election must be made within 12 months of the end of the first accounting period to which the new basis applies.

(3)If an election is made, an amount equal to one-sixth of the amount of the receipt—

(a)is treated as arising, and

(b)is brought into account in calculating the profits of the trade,

in each of the 6 periods of account beginning with the first period to which the new basis applies.

(4)But if, before the whole of the receipt has been so brought into account, the company permanently ceases to carry on the trade, the whole of the amount so far as not previously brought into account—

(a)is treated as arising, and

(b)is brought into account in calculating the profits of the trade,

immediately before the cessation.