Commentary on Sections Overview Overview Section 246: Basic meaning of “post-cessation receipt”
985.This section sets out the basic meaning of “post-cessation receipt”. It is based on sections 103 and 104 of ICTA.
986.Subsection (1) is the general rule that a post-cessation is a sum received after a person has ceased to carry on trade.
987.Subsection (2) deals with the case of a non-resident company liable to income tax. If a company ceases to be liable to corporation tax it is treated as ceasing to carry on the corporation tax trade. A post-cessation from that trade may be charged to income tax.
988.Subsections (3) and (4) explain how the idea of a person ceasing to carry on a trade is applied if the trade is carried on in partnership. If a partner leaves a firm and receives a sum, that sum may be a post-cessation receipt. In ICTA this is because the end of the partner’s “deemed trade or profession” is treated as a permanent discontinuance of a trade for the purposes of the post-cessation receipts rules.