Income Tax (Trading and Other Income) Act 2005 section 310

Acquisition of business: receipts from transferor's UK property business

Section 310 deals with the tax treatment of sums received by a person who acquires a UK property business (or part of one) from someone who has permanently ceased carrying it on, together with the right to receive future business income.

• When a transferor permanently ceases a UK property business and transfers the right to receive business sums to a transferee who then carries on that business, the section applies to determine how those sums are taxed.
• Sums received by the transferee as a result of the transfer, which were not already brought into account in the transferor's profit calculations before cessation, are taxed as receipts of the transferee's UK property business in the period they are received.
• Any such sums received after the transferor's business has ceased are specifically excluded from being treated as post-cessation receipts under the post-cessation receipt rules in Chapter 10.
• The section applies for income tax purposes only; separate corporation tax provisions exist under ICTA, and capital gains tax is excluded by virtue of the Taxation of Chargeable Gains Act 1992.