Corporation Tax Act 2009 section 188

Charge to tax on post-cessation receipts

Section 188 establishes that corporation tax on income applies to receipts arising from a trade after it has ceased.

• Post-cessation receipts from a trade are subject to the corporation tax charge on income.
• This is a separate tax charge from the one that applies to the ongoing profits of a trade.
• A post-cessation receipt is any amount received after a company has permanently stopped carrying on a trade, where that amount relates to the former trade.
• The income tax equivalent of this rule applies to individuals and is found in separate legislation.