Income Tax Act 2007 section 99

Reduction of relief for unpaid trade expenses

Section 99 reduces post-cessation trade relief where expenses were claimed as deductions in computing trading profits but remained unpaid when the trade ceased.

• Post-cessation trade relief for a tax year is reduced (but not below nil) by the total unpaid expenses at the year end, or by the person's share if they were a partner in a firm
• Any unpaid expense already used to reduce relief in one tax year is ignored when calculating reductions for later tax years, preventing the same expense from reducing relief twice
• If the person subsequently pays an unpaid expense that has already reduced their relief, the payment is treated as a qualifying payment under section 96, up to the lesser of the amount actually paid or the original reduction
• These rules apply equally to professions and vocations as they do to trades