Annex 1: Minor Changes in the Law Change 39: Trading income: valuation of stock: sections 164 to 167 and Schedule 1 Income tax
This Act amends ITTOIA (see Schedule 1 to the Act).
In the case of trading stock transferred to an individual carrying on a profession or vocation, the amendments allow the stock to be valued in accordance with section 176, 177 or 178 instead of section 175(4) of ITTOIA.
In the case of professional work in progress transferred to an individual or a company carrying on a trade, the amendment allows the work in progress to be valued in accordance with section 184(1) instead of section 184(2) of ITTOIA.
Any change in the valuation rules for transfers of stock and work in progress is necessarily favourable to one of the parties to the transfer and adverse to the other. But the overall effect of this change is to give more choice to taxpayers.
This change is in principle and in practice adverse to some taxpayers and favourable to others. But the numbers affected and the amounts involved are likely to be small.