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HMRC internal manual

Business Income Manual

Stock: non-trading transactions in stock: ways of disposing of or acquiring stock

Stock can give rise to a profit or loss by:

  • sale,
  • appropriations to and from stock,
  • insurance claim for part or total loss,
  • barter transactions,
  • use in the construction of a fixed asset,
  • write off of all or part due to obsolescence or slow moving, see stock valuation (BIM33100 onwards),
  • fall in net realisable value, see stock valuation (BIM33100 onwards),
  • theft or other loss.

The tax value at which stock is disposed of, or acquired, depends on whether the disposal is in the course of the trade or otherwise.

Where the stock has been acquired, or is sold, in a trading transaction thenBIM33300 onwards discusses some more unusual transactions. Where the stock is acquired or disposed of as a result of the discontinuance of a business then BIM33450 onwards gives the specific rules.