BIM80705 - Post-cessation receipts: Individual born before 6 April 1917 - title to relief - ICTA88/S109
To qualify for relief under ICTA88/S109, the individual must have been born before 6 April 1917. In addition:
- Where the liability arises under ICTA88/S104 (4) and (5) by virtue of a change of accounting basis before 19 March 1968 (see BIM80520), he must have been engaged in carrying on the business at the date of change.
- In any other case:
i) he must have been engaged in carrying on the business at 18 March 1968, and
ii) his profits must have been computed on a conventional basis (see BIM80520) throughout the period from 18 March 1968 to the date of discontinuance or change of accounting basis.
It follows that there can be no relief in respect of a business set up after 18 March 1968. Nor can there be any relief where a change is made from the earnings basis to “cash” or other conventional basis after 18 March 1968 and liability arises under ICTA88/S104 on a subsequent change of accounting basis or a discontinuance.
Except in the special case of a change from one conventional basis to another (for example, “cash” to “bills issued”) followed by a further change to the earnings basis or a discontinuance, an individual can obtain relief under ICTA88/S109 only once in respect of his interest in a particular business. In the case of a partnership where accounts are prepared on a conventional basis, relief can be claimed by each partner who qualifies on the first partnership change after 18 March 1968, which is treated as a discontinuance, but not on any subsequent partnership change.
