The date on which a business is ‘permanently
discontinued’ (ICTA88/S63) is normally the date on which it
‘closes its doors’ in circumstances which turn out to
be permanent. This is so even if at that time the proprietors
intended or hoped to continue trading, but that expectation was not
fulfilled (Marriott v Lane [1996] 69TC157, which although a capital
gains tax case should be applied for income tax purposes).
However, if activity is recommenced, and the question is
whether the new business is a continuation of the old, evidence of
the proprietor’s intention will be relevant (
BIM70580).
A mere decision to wind down or dispose of the business does
not of itself amount to a permanent discontinuance if trading
activity in fact continues after the decision (J & R
O’Kane & Co v CIR [1922] 12TC303).
