Commentary on Sections Overview Overview Section 190: Basic meaning of “post-cessation receipt”
715.This section sets out the basic meaning of “post-cessation receipt”. It is based on sections 103, 104 and 110 of ICTA. The corresponding rule for income tax is in section 246 of ITTOIA.
716.Subsection (2) deals with the unusual case of a company receiving a “sum” which arises from the carrying on of a trade by a person liable to income tax.
717.Paragraph (a) deals with a non-UK resident company liable to income tax. If a company becomes liable to corporation tax it is treated as ceasing to carry on the income tax trade. A post-cessation receipt from that trade may be charged to corporation tax.
718.Paragraph (b) applies where the trade was carried on in partnership. If a partner leaves a firm and a company receives a sum arising from the carrying on of the trade by that partner, the sum may be a post-cessation receipt.