Income Tax (Trading and Other Income) Act 2005 section 182

Valuation of work in progress on cessation

Section 182 sets out how work in progress must be valued when a person permanently ceases to carry on a profession or vocation.

• When a profession or vocation permanently ceases and work in progress is included in the profit calculation, it must be valued under section 184 (basis of valuation) or section 185 (election for valuation at cost).
• The valuation requirement does not apply where there is a change in the persons carrying on a profession, provided at least one person who was carrying it on before the change continues afterwards.
• The valuation requirement does not apply where the cessation of an individual's profession or vocation is caused by the individual's death.
• Although this section does not itself mandate that work in progress is valued at cessation, a valuation is normally required by the general obligation to calculate profits in accordance with generally accepted accounting practice.