BIM80515 - Post-cessation receipts: Receipts not chargeable - ICTA88/S103
Certain receipts are not chargeable under ICTA88/S103. These are:
- sums “otherwise chargeable to tax”,
- income arising abroad and received by a non-resident or by a person acting on his behalf,
- lump sums paid to the personal representatives of a deceased author for the assignment by them of literary etc copyright or Public Lending Rights,
- 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,
- sums received for the transfer of trading stock to which ICTA88/S100 and ICTA88/S102 applies,
- 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.
