Annex 1: Minor changes in the law made by the Act: Change 22: Trade etc and other income charged on withdrawal of relief after source ceases: sections 82, 104, 109 and 844
This change treats certain amounts as post-cessation receipts and other amounts as if the source had not ceased.
Sections 79(9), 79A(4), 79B(4), 83A(4), and 84(4) of ICTA create a charge under Schedule D Case VI if the trader is not chargeable under Schedule D Case I or II in the “chargeable period” in which a benefit is received. Section 491(3) of ICTA creates a similar charge on a distribution by a mutual concern. Section 584(4) of ICTA creates a charge under Schedule D Case VI if income becomes remittable after the trade or other source of income has ceased.
This Act unpacks Schedule D Case VI charges and deals with the income where it logically belongs. In most of these cases, the income is trading income.
As regards a trade profession or vocation, by treating the benefit or distribution as a post-cessation receipt, this Act:
	allows the trader to make the same deductions as those available from other post-cessation receipts;
	makes it clear that the benefit or distribution may be earned income and relevant earnings;
	allows an election to carry the benefit or distribution back in accordance with section 257 of this Act;
	removes any possibility that the benefit is charged both by the specific rule about benefits and by any general rule; and
	preserves the loss relief position under section 392 of ICTA (by virtue of entries in the table in section 836B of ICTA, inserted by paragraph 340 of Schedule 1 to this Act).
Section 844(4) of this Act contributes to the unpacking of Schedule D Case VI charge. It treats the source of the foreign income as not having ceased, where income that was relieved under section 842 ceases to be unremittable after the source has actually ceased. The income is then charged under the provision that would apply had section 843 (withdrawal of relief) applied instead. In a very few cases, the income may be charged at a lower tax rate than was the case under section 584(4) of ICTA. The loss relief position under section 392 of ICTA is also preserved by virtue of an entry in the table in section 836B of ICTA.
This change is in taxpayers' favour in principle and may benefit some in practice. But the numbers affected and the amounts involved are likely to be small.