Income Tax (Trading and Other Income) Act 2005 section 47

Valuation of trading stock on cessation

Section 47 provides a transitional rule disapplying the normal trading stock cessation valuation requirement for the portion of a straddling period of account that falls before 6th April 2004.

• Applies where a trade's period of account begins before 6th April 2004 and ends on or after 6th April 2005 (a "straddling period of account")
• Only relevant where paragraph 48 requires the profits or losses of that period to be calculated under Part 2 of the Act
• The normal cessation valuation rule in section 173(2) is switched off for the portion of the straddling period running from its start up to 5th April 2004
• Trade profits or losses for that earlier portion must be calculated without applying the cessation stock valuation rule