Income Tax (Trading and Other Income) Act 2005 section 96B

Section 96A: supplementary provision

Section 96B provides supplementary definitions and rules that support the operation of section 96A, which deals with capital receipts under the cash basis of accounting for trades.

• Any question about whether expenditure has been brought into account in calculating trade profits must be determined on a just and reasonable basis
• A trader "enters the cash basis" for a tax year if the cash basis applies for that year but did not apply for the previous year
• Expenditure is "cash basis deductible" if a deduction would be allowed for it under the cash basis, assuming it was paid in that tax year
• The section defines key terms including disposal value, market value amount, pool, qualifying expenditure, and unrelieved qualifying expenditure for the purposes of sections 96A and 96B