Commentary on Sections Overview Section 1277: Income charged on withdrawal of relief after source ceases
3271.This section sets out how relief given under this Part is withdrawn when income ceases to be unremittable after the source of the income has ceased. It is based on section 584(4) of ICTA. The corresponding rule for income tax is in section 844 of ITTOIA.
3272.If relief cannot be withdrawn in accordance with section 1276, because the trade or property business in question has permanently ceased, the amount in respect of which relief is withdrawn is dealt with as a post-cessation receipt under Chapter 15 of Part 3 (trading income) or Chapter 9 of Part 4 (property income) of this Act. In both cases, the provision in the relevant Chapter limiting its application is disapplied as unnecessary.
3273.For any other case where relief is withdrawn after the source has ceased, subsection (4) provides that the income should be taxed as if the source had not ceased. See Change 19 in Annex 1.
3274.Income charged by virtue of this section is, in the source legislation, charged under Schedule D Case VI (rather than Schedule D Case V or another charge). The potential relevance of such income to relief under section 396 of ICTA (losses from miscellaneous transactions) is preserved by consequential amendments in Schedule 1 to this Act, which amend that section and insert section 834A of ICTA. See the commentary on Schedule 1 for the insertion of section 834A of ICTA.