Income Tax (Trading and Other Income) Act 2005 section 17

Effect of becoming or ceasing to be a UK resident

Section 17 deals with the income tax consequences when a sole trader either becomes or ceases to be UK resident, or has a split year for residence purposes.

• A change of residence occurs when an individual sole trader becomes or ceases to be UK resident, or experiences a split year for tax residence purposes
• The trade is treated as permanently ceasing at the point of the residence change, and if the individual continues trading, a new trade is deemed to start immediately afterwards
• Losses made before the residence change can still be carried forward and set against profits arising after the change
• The same rules apply to professions and vocations, and separate partnership rules apply where a trade is carried on by a firm