Income Tax (Trading and Other Income) Act 2005 section 106D

Capital receipts

Section 106D disapplies the non-commercial transaction rules in section 106C where the transaction involves a capital receipt already covered by the capital receipts provisions.

• Section 106C adjustments for non-commercial transactions do not apply where a capital receipt is involved
• The exclusion applies when section 96A(4) or section 96A(5) governs the treatment of the relevant transaction
• Section 96A deals specifically with capital receipts received while using the cash basis or after leaving it
• This prevents a double counting situation where both the capital receipts rules and the non-commercial transaction rules could otherwise apply to the same event