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Version status: In force | Document consolidation status: Updated to reflect all known changes
Version date: 31 March 2006 - onwards

56. Amendment of Chapter 7 (special measures on discontinuance of, and change of basis for computation of profits or gains of, a trade or profession) of Part 4 of Principal Act.

Chapter 7 of Part 4 of the Principal Act is amended by inserting the following after section 95:

"Change of basis of computation of profits or gains of a trade or profession.

95A.

(1) In this section -

'Accounting Standards Board' means the body known as the Accounting Standards Board established under the articles of association of The Accounting Standards Board Limited, a company limited by guarantee and registered in England;

'chargeable period' has the same meaning as in section 321(2).

(2) Where -

(a) in a case to which section 94(3) does not apply there has been a change in the basis of valuing work in progress for the purposes of computing profits or gains of a trade or profession chargeable under Case I or II of Schedule D, and

(b) the amount (in this subsection referred to as the 'relevant amount') of the value of work in progress at the time of the change is allowed as a deduction in computing profits or gains for tax purposes for a chargeable period after the change (in this section referred to as the 'relevant period'),

then, in so far as the counterbalancing credit in connection with that work in progress, taken into account in computing profits or gains for tax purposes for the period preceding the relevant period, is less than the relevant amount, tax shall be charged under Case I or II of Schedule D for the relevant period on so much of the relevant amount as exceeds that credit.