Test your understanding
(1). Byron has been an unincorporated trader for many years, preparing accounts to 31 December each year. Byron’s transition profits in the tax year 2023/24 were £28,400, of which £13,500 will have been subject to income tax prior to the tax year 2025/26.
Byron intends to cease trading on 28 February 2026 and will prepare a final set of accounts for the 14-month period ending on that date. His budgeted tax-adjusted trading profit for this period is £58,100.
Explain:
- Byron’s taxable trading income for the tax year 2025/26, and
- The situation regarding his transition profits.
(2). Duncan ceased trading and realised a loss in his final trading period.
What alternative reliefs are available in respect of this loss?
