Revenue Note for Guidance

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Revenue Note for Guidance

93 Cash basis, etc: relief for certain individuals

Summary

A measure of relief from the charge to tax on post-cessation receipts is available to individuals who on 6 April, 1970 were 51 years of age or older and who were assessed to tax on the cash basis.

Details

Definitions

(1) “the net amount” with which a person is chargeable to tax in respect of post-cessation receipts under section 91 is the amount so chargeable after allowing such deductions as are allowed by that section but before any relief which is given by this section.

“relevant date” is either the date of discontinuance (for the purposes of section 91) or the date of change of accounting basis (for the purposes of section 94).

The relief

(2) The 3 conditions which must be satisfied for relief to be given under this section are —

  • the individual must have been born before 6 April, 1919,
  • he/she must have been engaged in the business on 4 August, 1970, and
  • on 4 August, 1970, he/she must have been accounting for his/her profits on a conventional basis and must have continued to do so until the cessation or the change of basis which brought section 91 or 94 into operation.

Where these conditions are met, the net amount on which the individual is to be charged to tax under section 91 or 94 is reduced by multiplying that amount by the fraction specified by subsection (4).

(3) Certain necessary modifications are made to subsection (2) where a charge arises under section 94 on a change of accounting basis taking place on a date before 4 August, 1970. In such a case the conditions for relief to be given under this section are that —

  • the individual must have been born before the 6th April, 1919, and
  • he/she have been engaged in the business at the time of the change.

(4) The fraction to be used for the purposes of giving the relief under subsection (2) is —

  • 19/20ths (95 per cent) for an individual who was not 52 on 6 April, 1970,
  • 18/20ths (90 per cent) for an individual who was 52 on 6 April, 1970, and so on, reducing by 1/20th (5 per cent) for each additional year of age up to the age of 64, or
  • 5/20ths (25 per cent) for an individual who was 65 or over on 6 April, 1970.

Relevant Date: Finance Act 2019