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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Post-cessation receipts and expenses: territorial scope of the provisions

S243 Income Tax (Trading and Other Income) Act 2005, S189 Corporation Tax Act 2009

Income received by UK non-residents or received in relation to trades carried on wholly outside the UK are not subject to these provisions

The charging provisions discussed in BIM90010 do not apply to post-cessation receipts which:

  1. arise from a trade carried on wholly outside the UK
  2. are received by a UK non-resident (or received by someone on behalf of the UK non-resident who is entitled to it) as long as the income comes from an overseas source

Note that the Channel Islands and the Isle of Man are considered to be overseas for UK tax purposes.

This means that if a non-resident receives the post-cessation receipt but it is from a UK source, the income is taxed under the post-cessation receipt rules.

The charging provisions do not apply where the recipient is non-resident and the income is from a non-UK source.

Therefore, unless any other Income Tax or Corporation Tax provisions apply to tax these receipts, this income is not taxable in the UK. It may of course be taxable in the recipient’s country of residence.


Similarly, there are special rules where a partner in a partnership is UK resident but not domiciled in the UK and is taxed on the remittance basis.

A post-cessation receipt is not subject to tax under these provisions if:

  1. it comes from an overseas source
  2. it is received due to a trade carried on by the partnership
  3. the partner is taxable on the remittance basis in relation to the period in which the receipt would be chargeable (ie the income is relevant foreign income in his hands)

For further information on the concepts mentioned on this page see:

  • residence of individuals, trustees and personal representatives - RDRM10000
  • residence of companies - INTM120000
  • domicile - RDRM20000
  • remittance basis of taxation - RDRM30000
  • relevant foreign income - RDRM31110 and RDRM31140