Post-cessation receipts and deductions on CT600 box 205
Short version. HMRC allows post-cessation receipts in CT600 box 205. Report the gross receipt separately and deduct qualifying amounts under CTA 2009 s.196. The taxable receipt cannot fall below £0.
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1. Keep the gross receipt and deduction separate
A post-cessation receipt arises after a trade has permanently stopped. CTA 2009 s.188 imposes the charge on post-cessation receipts. Section 196 allows qualifying losses, expenses and debits, subject to the statutory conditions and ordering in s.197.
Enter each credit once. Ordinary income not falling under another heading stays in its existing row. Post-cessation receipts have their own field. Other income not taxable and non-trading exchange gains apply to ordinary income only, not to the receipt.
Fictional example: a £1,600 post-cessation receipt with a £400 qualifying deduction contributes £1,200 to box 205. An additional £300 ordinary credit contributes separately. If the receipt deduction is larger than the receipt, its net contribution is £0. The service does not carry an excess deduction forward.
Use Show all Profit & Loss options above or below the Profit & loss table in the wizard to enter Post-cessation receipts and Post-cessation deductions. This keeps turnover and its trading treatment unchanged. Enter each receipt once. Running costs are not automatically qualifying section 196 deductions. Enter your prepared deduction separately. For two enter-once returns, confirm the allocation beneath the fields.
2. Rates and the section 198 election
A later period may be a CIHC period, depending on the statutory purpose test.
The service does not make a CTA 2009 s.198 election to use cessation-period rates. HMRC says you “may not be able to file your return online” when electing to apply those rates and directs you to your HMRC office for clarification. The ordinary receipt-period return remains available without that election.
Use the post-cessation filing steps. Review the detailed computation of box 205. This is general filing guidance. You decide the qualifying deduction and applicable treatment.
Section 196 deductions must meet its statutory conditions. They exclude expenditure arising directly or indirectly from the cessation itself and any amount already deducted elsewhere. Read the complete section 196 rule when preparing your deduction.
Explore these related questions:
- Income received after a company stops trading: is it taxable?
- Bank interest after a company has stopped trading: do you still file a CT600?
- Post-cessation receipts and section 196 deductions: worked examples
- Voluntary strike-off and your final Corporation Tax returns