Income Tax Act 2007 section 837C

Charge to income tax on winding up receipts

Section 837C charges income tax on sums received during or after the winding up of a deposit-taking business, but only to the extent those amounts were not already included in the trade's profit calculations before it permanently ceased.

• Winding up receipts from a deposit-taking trade are chargeable to income tax, but only where their value was not already accounted for in calculating the trade's profits before permanent cessation.
• A winding up receipt is any sum received by the company or its liquidator after the start of winding up proceedings or, if later, after the permanent cessation of the deposit-taking trade.
• Sums received on behalf of a third party who is entitled to the money — to the exclusion of the company and its liquidator — are not treated as winding up receipts.
• Sums realised from the transfer of an asset that was required to be valued under the trading stock cessation rules in section 173 of ITTOIA 2005 are also excluded from being winding up receipts.