A principal dentist usually has a practice, consisting of a list
of patients, premises, equipment and staff. That practice, in which
they exercise their professional skill, is the source of the
profits to be assessed under Case II of Schedule D. As the person
receiving or entitled to the income from that source, the dentist
is the person chargeable (ICTA88/S59 (1)). It follows that, if
there is a change in the person carrying on that practice, there
will be a succession and ICTA88/S113 (1) will apply. The position
of a dentist with a practice in a particular area is to be
distinguished from that of a professional person who can exercise
their professional skills anywhere in the country; see Seldon v
Croom-Johnston [1932] 16TC740, Rex v City of London Commissioners,
ex parte Gibbs [1942] 24TC221 at p.239, and Sargent v Barnes [1978]
52TC335. Accordingly, if a principal dentist leaves a practice in
one location and moves to a practice in another location, the
income from both practices must be computed on cessation and
commencement lines. The argument that a principal dentist carries
on one continuous profession wherever they go should not be
accepted where they operated in established practices (see
BIM70625).
The position of an associate dentist may be different.
Associates may have no patients of their own, no premises or staff
and even no equipment. They can make their services available to
one or more principal dentists on terms which usually preclude them
from retaining any of the patients as their own at the end of the
engagement. In those circumstances as long as they are an associate
dentist they are likely to carry on one continuous profession
wherever they go. Accordingly, the cessation and commencement
provisions should not be applied when they move from one associate
position to another.
But associates may work on terms that make their situation
for these purposes similar to that of a principal. So the correct
tax treatment is not dictated by the label “associate”.
Whether or not there has been a cessation, or a succession, when an
associate moves between practices will depend on the facts of each
particular case.
The cessation and recommencement provisions are likely to be
applicable where someone permanently ceases to be an associate and
becomes a principal dentist, either in a practice of their own or
as a partner in another practice (even if they had previously
worked for that practice as an associate).
