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How to treat post-cessation items if property business ceases

Source: HM Revenue & Customs | 08/05/19

There are special rules for the taxation of post-cessation receipts after a trade has ceased. The legislation clearly states that the person who receives or is entitled to the post-cessation receipt is the person who is subject to Income Tax or Corporation Tax on the income. This does not have to be the same person who carried on the original trade.

HMRC manuals state that: a receipt which arises from a property rental business, after it has ceased, is taxable under special rules provided, it is assumed that the taxpayer has not already included that receipt in the computation of their rental business profits.

The taxpayer may also be able to claim relief for post-cessation expenses for which they have had no relief. One example might be the cost of background heating for empty premises to keep down condensation and so maintain the value of the property for later sale.

A claim for post-cessation property relief is possible if a taxpayer ceases to carry on a UK property business and within 7 years makes a 'qualifying payment' or a 'qualifying event' occurs in relation to a debt of the business. A claim to relief must be made on or before the first anniversary of the 31 January following the end of the tax year in which the payment is made.

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Some accountancy websites also provide pages and pages of tax information, helpsheets, etc. We prefer to give clients personally tailored advice. So, if you want details of tax rates and allowances just go to the HMRC website on which you should find what you’re looking for. If you need more individual advice please contact us.

Below are links to websites you may find of interest, but as we like to support our local community and clients, we have included links to websites that may be of interest:

HMRC

FT

BBC

VEALE WASBROUGH VIZARDS

CESP

PRACTICE INDEX

SIMCOMM ACADEMY

More Local:

FOOTPLATE EXPERIENCE

ANGLEBURY PRESS

OFFCAMBER.CO.UK

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