Section 99 — Income Tax Act 2007: Reduction of relief for unpaid trade expenses

Reduction of relief for unpaid trade expenses 99 1 This section applies for the purposes of post-cessation trade relief in respect of a person's trade if a deduction was made in calculating the profits of the trade for an expense not actually paid (an “unpaid expense”).

2 The amount of the person's relief for a tax year is reduced (but not below nil) by—

a the total amount of unpaid expenses at the end of the tax year, or b if the person carried on the trade as a partner in a firm, the person's share of the total amount of unpaid expenses at the end of the tax year.

3 But any unpaid expense which is taken into account in reducing the amount of the person's relief for a tax year is left out of account in making reductions for subsequent tax years.

4 If the person actually pays an amount in respect of an unpaid expense taken into account in reducing the amount of the person's relief, the person is treated as making a qualifying payment for the purposes of section 96.

5 The amount of the qualifying payment is—

a the amount actually paid, or b if less, the amount of the reduction.

6 This section applies to professions and vocations as it applies to trades.