Income Tax (Trading and Other Income) Act 2005 section 174

Meaning of "trading stock"

Section 174 defines what "trading stock" means for the purposes of the rules on valuing stock and work in progress when a trade ceases.

• Trading stock includes any property (including land) that is sold in the ordinary course of the trade, or would be sold once mature or fully manufactured, prepared or constructed, together with any materials used in that process.
• Trading stock also includes services performed in the ordinary course of the trade that are wholly or partly completed at the time the trade ceases, provided a charge would normally be expected for those services.
• Any articles produced or materials used in performing those services also count as trading stock.
• References to the sale or transfer of trading stock extend to the sale or transfer of any benefits and rights arising, or reasonably expected to arise, from the performance of such services.