Corporation Tax Act 2009 section 1277

Income charged on withdrawal of relief after source ceases

Section 1277 deals with how previously granted unremittable income relief is withdrawn and taxed when the income becomes remittable after the company has already ceased the trade, property business, or other source from which the income originally arose.

• Where unremittable income relief is withdrawn under section 1276 but the company has already permanently ceased the relevant trade or property business, or no longer possesses the income source, special charging rules apply
• If the income arose from a trade, it is treated as a post-cessation receipt under the trading income rules, with the normal limitation on the extent of charge disapplied
• If the income arose from a property business, it is treated as a post-cessation receipt from a UK property business under the property income rules, again with the normal limitation on the extent of charge disapplied
• If the income arose from any other source that has since ceased, the company is taxed as though it still possessed that source at the time the relief is withdrawn