Income Tax (Trading and Other Income) Act 2005 section 353

Basic meaning of "post-cessation receipt"

Section 353 defines what counts as a "post-cessation receipt" in the context of a UK property business that has permanently ceased.

• A post-cessation receipt is any sum received after a person permanently stops carrying on a UK property business, provided that sum arose from the business activities before cessation.
• Where the business ceased during a cash basis tax year, a sum only qualifies as a post-cessation receipt if it would have been included in the profit calculation under the cash basis had it been received just before cessation.
• If a partner leaves a firm that carries on a UK property business while at least one other partner continues the business, the departing partner is treated as having permanently ceased the business for these purposes.
• This means a departing partner can be charged income tax on post-cessation receipts even though the property business itself continues under the remaining partners.