Revenue Note for Guidance

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Revenue Note for Guidance

90 Valuation of work in progress at discontinuance of profession


This section deals with the tax treatment of “work in progress” at the discontinuance or deemed discontinuance of a profession. It only applies in cases where a valuation is taken of the work of the profession in progress at the discontinuance. It follows that it does not apply where work in progress is not taken into account (that is, where the profits of the profession have been computed on a “cash basis” or other basis which excludes work in progress).

The person engaged in the profession is given the option either to have subsequent receipts for the work in progress treated for tax purposes —

  • as post-cessation receipts (section 91), or
  • to have the value of the work in progress included at market value, or at the price obtained for it on transfer to another professional, in his/her final account.


(1) Work in progress at the discontinuance of a profession which is transferred to another professional person who can deduct the cost of it as an expense is to be valued at the price for which it is transferred or, if it is not so transferred, at the price it would have fetched on an arm’s length transfer.

(2) Where a profession has been discontinued, the person carrying on the profession immediately before the discontinuance has the option to elect that any excess of the value of the work in progress over its cost is not to be taken into account in computing the profits of his/her final period, but instead anything he/she receives for the transfer of the work in progress in excess of its cost is to be treated as a post-cessation receipt chargeable under section 91. This election must be made in writing to the inspector within 24 months after the discontinuance.

(3) The section applies where a profession is treated as discontinued for tax purposes in the same manner as it applies for an actual discontinuance. However, the section does not apply where a profession carried on by a single individual is discontinued by reason of that individual’s death.

(4) Work in progress at the discontinuance of a profession includes wholly or partially completed professional work and articles produced and materials used in undertaking such work.

Relevant Date: Finance Act 2021