Income Tax Act 2007 section 97

Meaning of "qualifying payment"

Section 97 defines what counts as a "qualifying payment" for the purposes of post-cessation trade relief under section 96.

• A qualifying payment must be made wholly and exclusively for one of four specified purposes (A to D) after a person has permanently ceased carrying on a trade
• Purposes A and B cover payments to remedy defective work, goods or services supplied during the trade, including damages and related legal or professional costs
• Purpose C covers insurance premiums against liabilities or professional costs arising from claims about defective work, goods or services
• Purpose D covers payments made to collect a debt that was previously included when calculating the profits of the trade