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HMRC internal manual

Business Income Manual

Post-cessation receipts and expenses: other provisions relieving expenses incurred after the cessation of the trade

As discussed in BIM90080, an expense can only be relieved once and so if relief can be obtained for the same expense under any other provision in the Taxes Acts, the expense is not a post-cessation expense.

There are a number of other provisions in the Taxes Acts which can be used to relieve expenses which arise after cessation of the trade which take priority over the post-cessation expenses rules.

These include:

  • employer pension contributions which would otherwise be treated as being paid after cessation due to the operation of the spreading provisions (see S198 Finance Act 2004 and RPSM05102120)
  • employer pension contributions made after cessation in relation to pension scheme deficiencies (see S199 FA 2004 and RPSM05102040)
  • expenditure incurred after cessation to restore a site (eg by landscaping) which the trader has used for mineral extraction (see S416 Capital Allowances Act 2001 and CA50280)
  • expenses of companies in compulsory liquidation which previously accepted deposits as a bank or permitted EEA credit institution (see Chap 3A Part 14 Income Tax Act 2007 for expenses of non-resident companies subject to Income Tax and see Chap 6 Part 13 Corporation Tax Act 2010 for companies subject to Corporation Tax)
  • Lloyd’s Underwriters - not dealt with in local offices. For details of the offices dealing with the taxation of Lloyd’s Underwriters, see the Lloyd’s Manual