Income Tax (Trading and Other Income) Act 2005 section 28A

Money's worth

Section 28A ensures that where a trading transaction involves non-cash consideration (known as "money's worth") rather than actual money, the value of that consideration is still brought into account as a trading receipt when calculating profits.

• Where a trade transaction involves money's worth rather than cash, the value of that money's worth must be treated as a trading receipt for the purpose of calculating profits.
• This rule only applies if the amount would have been a receipt had the transaction involved actual money, and an equivalent amount is not already being brought into account under another provision.
• If another specific provision in Part 2 of the Act expressly deals with how to bring money's worth into account as a receipt, that specific provision takes priority over this general rule.
• The effect is to prevent traders from avoiding recognition of income simply because they received goods, services, or other non-cash benefits instead of money.