Any overlap relief not used on a change of accounting date (see BIM71090) is given in full in the tax year in which the business ceases.
The business in the example at
BIM71090 ceases on 31 May 2020. The
overlap profit available for relief is £24,963.
The basis periods for the final 2 years are:
| 2019-2020 | Year 10 | 12 months to 31 October 2019 |
| 2020-2021 | Final year | 7 months from 1 November 2019 to 31 May 2020 |
The profits for the 7 months to 31 May 2020 are £80,000.
Overlap relief for the remaining overlap profits (£24,963) is
deducted to give assessable profits for the 2020-2021 of
£55,037.
The total profits assessed over the life of this business
will exactly equal the total profits made.
