Corporation Tax Act 2009 section 195

Transfer of trading stock

Section 195 ensures that money received from selling trading stock after a company permanently stops trading is not taxed again as a post-cessation receipt, provided the stock was properly valued at cessation.

• When a company permanently ceases to trade, any proceeds from selling its trading stock are excluded from the post-cessation receipts charge.
• This exclusion applies only where the stock has already been valued and brought into account under the stock valuation rules at cessation (Chapter 11 of Part 3).
• The purpose of the rule is to prevent double taxation: once stock has been properly valued at cessation, there is no need to tax the proceeds again when the stock is actually sold.
• "Trading stock" has the same meaning as defined in section 163, which covers items held for sale in the ordinary course of the trade.