Corporation Tax Act 2009 section 184

Cases where adjustment not required until assets realised or written off

Section 184 provides a special timing rule for basis change adjustments that relate to trading stock or depreciation, deferring the adjustment until the relevant asset is realised or written off.

• This section applies when a change of accounting basis results in a tax adjustment affecting trading stock or depreciation amounts.
• The affected amounts are closing trading stock under the old basis, opening trading stock under the new basis, and any depreciation amounts.
• Unlike the general rule (which triggers an adjustment at the start of the first period on the new basis), any adjustment for stock or depreciation is deferred.
• The resulting trade receipt or trade expense is only recognised when the specific asset to which it relates is actually disposed of or written off.