Link Report

(iii) be within the charge to tax under Case I of Schedule D in respect of that trade.

(2)(a) In any case where a person’s accounting period does not coincide with a period of account or with 2 or more consecutive periods of account, the person’s increase in stock value in the accounting period shall be determined for the purposes of section 666 not in accordance with subsection (1) of that section but by reference to a period (in this section referred to as “the reference period”) determined in accordance with this subsection.

(3)(a) In any case where subsection (2)(a) applies, a person’s increase in stock value in the accounting period shall be determined for the purposes of section 666 by the formula—

(b) In any case where a person’s increase in stock value in an accounting period is to be determined in accordance with paragraph (a), then, in section 666 and in subsections (4) to (6), any reference to the person’s closing stock value shall be construed as a reference to the value of the person’s trading stock at the end of the reference period.

(4)(a) A person shall not be entitled to a deduction under section 666 for an accounting period if that accounting period ends by virtue of the person ceasing to—

(5)(a) Subject to paragraphs (b) to (d), where a person claims a deduction under section 666 and, immediately before the beginning of an accounting period, the person was not carrying on the trade to which the claim relates, then, unless—

the person shall be treated for the purposes of section 666 and subsections (1) to (4) as having at the beginning of the accounting period trading stock of such value as appears to the inspector to be just and reasonable trading stock of such value as is just and reasonable.