Part 4: Income tax, corporation tax and capital gains tax Section 41: Valuation of trading stock on cessation Details of the section
Section 41 amends section 162 of the Corporation Tax Act 2009 (CTA 2009) and section 173 of the Income Tax (Trading and Other Income) Act (ITTOIA) 2005.
	Subsection (1) inserts new subsections (2A), (2B) and (2C) into section 162 of CTA 2009.
	New subsection (2A) of section 162 of CTA 2009 ensures that, where the transfer pricing rules of Part 4 of the Taxation (International and Other Provisions Act) (TIOPA) 2010 apply, there can also be an adjustment or further adjustment under section 162 of CTA 2009. This ensures that the value of the trading stock to be used in computing profits for corporation tax purposes is the full value, determined under sections 164 to 167 of CTA 2009. The subsection compares the market value that should be recognised on the cessation with the amount actually recognised, having applied the transfer pricing rules. If the market value is the higher of the two amounts, subsection (2B) then applies.
	New subsection (2B) of section 162 of CTA 2009 directs that, if the market value is greater than the transfer pricing amount, a further adjustment is made to ensure that the amount recognised for tax purposes is equal to the market value.
	New subsection (2C) of section 162 of CTA 2009 defines the two key amounts - the market value, and the amount brought into account after the application of Part 4 of TIOPA 2010.
	Subsection (2) inserts new subsections (2A), (2B) and (2C) into section 173 of ITTOIA 2005, to achieve the same effect for income tax as the new subsections (2A), (2B) and (2C) of section 162 of CTA 2009 have for corporation tax.
	Subsection (3) sets out the commencement rule. The changes have effect for a cessation of a trade that takes place on or after 8 July 2015.