Corporation Tax Act 2009 section 198

Election to carry back

Section 198 allows a company to elect to have a post-cessation receipt taxed as though it had been received on the date the trade ceased, provided the receipt arises within six years of cessation.

• A post-cessation receipt must be received within an accounting period beginning no later than 6 years after the trade permanently ceased
• The company may elect for the receipt to be taxed as if it had been received on the date of cessation, effectively carrying back the tax charge
• The election must be made within 2 years of the end of the accounting period in which the receipt is actually received
• The election does not displace deductions already made or alter the accounting period in which the receipt is formally recognised for certain purposes