BIM80515 - Post-cessation receipts: receipts not chargeable: ICTA88/S103

Certain receipts are not chargeable under ICTA88/S103. These are:

1. sums ’otherwise chargeable to tax’,
   
   
2. income arising abroad and received by a non-resident or by a person acting on his behalf,
   
   
3. lump sums paid to the personal representatives of a deceased author for the assignment by them of literary etc copyright or Public Lending Rights,
   
   
4. on or after 1 August 1989, lump sums paid to the personal representatives of a deceased designer of a design in which design right subsists as consideration for the assignment by them, wholly or partly, of that right,
   
   
5. sums received for the transfer of trading stock to which ICTA88/S100 and ICTA88/S102 applies,
   
   
6. certain sums realised by the transfer of professional etc work in progress as set out in BIM70690.
   
   

Examples of receipts within (a) above are:

i) royalties and similar sums received under agreements made by a person to whom copyright has been assigned;

(In these cases, if the rights have been taken over by a successor or third party in the exercise of his trade or profession, the royalties etc will form part of the receipts of that business chargeable under Case I or II of Schedule D. If the rights have been taken over by a non-trader, the royalties etc will represent income from a property chargeable under Case III, V or VI, as appropriate - see, in this connection, BIM50725. As regards liability under ICTA88/S103 on the consideration received for an assignment, see BIM80530).

ii) interest which accrues to a moneylender or his estate after the cessation of his business.

Such interest is chargeable under Case III, Schedule D - see Bennett v Ogston [1930] 15TC374, approved and distinguished in Carson v Cheyney's Executor).

iii) trade debts which had been written back to the profit & loss account and included in Schedule D Case I or II profits. The debt may have been written back to the profit & loss account before being formally released by the creditor. For more information on trade debt write backs see BIM40265.