Income Tax (Trading and Other Income) Act 2005 section 257

Election to carry back

Section 257 allows a taxpayer (or their personal representatives) to elect that a post-cessation receipt be taxed as if it had been received on the date the trade ceased, rather than in the year it was actually received.

• The election is available where a post-cessation receipt is received in a tax year beginning no later than 6 years after the permanent cessation of the trade.
• The taxpayer or their personal representatives may elect to have the receipt taxed as though it was received on the date the trade ceased.
• Despite being treated as received at cessation, the election is given effect in the tax year in which the receipt is actually received.
• The election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year of receipt.