CH 6 - The Current basis and Closing year rules

Question 1

CYB

How is profit taxed under
Current Year Basis

Answer 1

the profits of the 12 month accounting period ending in the tax year

Question 2

CYB

When overlap profits arrise

Answer 2

Overlap profits arose under the CYB where a trader was taxed twice on the same profit.

(under openiing year rules unless the trader had 31/03 or 05/4 year end or change of accounting date)

Question 3

CYB

CLOSING YEAR RULES
When it applies

Answer 3

apply where a business which commenced prior to 2023/24 ceases trading in 2023/24.

Up to and including the penultimate tax year of trading, the current year basis rules apply.

Question 4

What are bais periods for tax year
of cessation

Answer 4

the day after the previous basis period ended to the date of cessation

from those profits we deduct unrelieved overlap profits to arrive a the taxable trading income of the final tax year of trade