Commentary on Sections Overview Chapter 2: Other general rules Section 1307: Apportionment etc of miscellaneous profits and losses to accounting period
3345.This section provides for apportionment of profits and losses when a company’s period of account does not coincide with an accounting period. It is based on section 72 of ICTA. The corresponding rule for income tax is in sections 203 and 871 of ITTOIA.
3346.Section 72 of ICTA applies “in the case of any profits or gains chargeable… under Case I, II or VI of Schedule D”. Apportionment is therefore not limited to the case of profits or losses of a trade. See the related commentary for section 52.
3347.The section applies where income is chargeable under a provision to which section 834A of ICTA applies. That section is inserted by Schedule 1 to this Act. Section 834A of ICTA does not apply to income to which Chapter 8 of Part 10 (income not otherwise charged) applies which arises from a source outside the United Kingdom (see subsection (3) of that section). Subsection (2) of this section qualifies the reference to that section so that the benefit of the apportionment rules extends to such income (that is, to income charged in the source legislation under Schedule D Case V). See Change 95 in Annex 1.
3348.The only circumstance in which aggregation within subsection (3)(b) will occur is when a company is in liquidation and has fixed accounting periods of 12 months in accordance with section 12 of this Act.
3349.This section does not carry over the rewrite change in section 871(5) of ITTOIA whereby apportionment is permitted by a measure of time other than the number of days in the respective periods, as required by section 72(2) of ICTA. HMRC consider that a day cannot fall into more than one accounting period.
3350.See also the paragraph headed “miscellaneous profits and losses: apportionment to accounting periods ending before 1 April 2009” in Part 21 of Schedule 2 to this Act which provides for a period of account that straddles the end of the financial year 2008 and the beginning of the financial year 2009.