Taxes Management Act 1970 Schedule 1B paragraph 5

Carry-back of post-cessation etc. receipts

Schedule 1B paragraph 5 deals with how claims work when a person elects to carry back post-cessation receipts so they are taxed in the year the trade ceased rather than the year they were actually received.

• A person receiving a post-cessation receipt can elect to have it taxed as if it were received in the year of cessation (the "earlier year") rather than the year of actual receipt (the "later year")
• The claim relates to the later year and is for the difference between the tax actually chargeable for the earlier year and the tax that would have been chargeable if the election took effect in that year
• Where associated claims exist, both figures are adjusted on the assumption that those associated claims have also been given effect in the earlier year, and no double relief is given for losses or allowances already deducted against the post-cessation receipt
• The claim is given effect by increasing the tax payable for the later year, effectively removing the receipt from that year's charge by adjusting the tax position