Income Tax (Trading and Other Income) Act 2005 section 255

Further rules about allowable deductions

Section 255 sets out additional rules governing how deductions may be made from post-cessation receipts, including restrictions on duplication, the order in which losses must be applied, and certain receipts from which no deduction is permitted.

• Each allowable amount may only be deducted once against post-cessation receipts — no double deductions are permitted.
• Losses must be set against post-cessation receipts of earlier tax years before later tax years, but cannot be set against receipts charged for a year before the loss arose.
• No deductions are allowed against amounts treated as post-cessation receipts under section 248(4) (debts paid after cessation) or section 250 (receipts relating to post-cessation expenditure).
• These rules complement the allowable deductions set out in section 254 and ensure that relief is applied in a consistent and logical order.