Revenue Note for Guidance

The content shown on this page is a Note for Guidance produced by the Irish Revenue Commissioners. To view the section of legislation to which the Note for Guidance applies, click the link below:

Revenue Note for Guidance

95 Supplementary provisions as to tax under section 91 or 94


This section is supplementary to the charge to tax provided for by section 91 or 94.


(1) Where the right to a post-cessation receipt such as a bad debt is transferred in return for a consideration, the consideration is made chargeable to tax in the hands of the person assigning the right. If the right is not transferred at an arm’s length price, it is to be valued for tax purposes as if it had been so transferred. The provision also applies to the transfer for value of sums chargeable under section 94 as a result of a change of accounting basis

(2) Where, by virtue of section 91, an individual is taxable on a post-cessation receipts and the profits/gains of the business to which the individual was entitled before the discontinuance were treated as earned income, the individual is entitled to have any post-cessation receipts treated as earned income but after any reduction in those receipts allowed by section 93.

(3) A person receiving post-cessation receipts of his/her business, or receipts following a change of accounting basis, in a year beginning not later than 4 years after the cessation or change has the option to have the amount received taxed as if the receipt arose in the last year of his/her business or in the year of the change of basis instead of for the year in which the individual obtains the receipts. This option must be claimed within 2 years after the end of the tax year in which the receipts are obtained. Any unrelieved losses and capital allowances already deducted under section 91(4) (that is, in determining the assessable amount) cannot be claimed against the amended assessment which (as a result of the election) is to be made for the last year of the business or for the year of change of basis. The period of 4 years referred to is the period within which an assessment may normally be made for any earlier year of assessment (see section 924(2)).

(4) In the case of a profession, where work in progress at the discontinuance is sold for a lump sum on the discontinuance or the business is transferred and the successor completes the work in progress on behalf of the predecessor and pays over to him or her an appropriate sum, the person who was carrying on the business is charged to tax on whatever he/she receives as a post-cessation receipt under section 91. It is to be noted that such a charge only arises where the accounts were prepared on a “cash” or other conventional basis which did not take work in progress into account. Where work in progress is taken into account at the discontinuance of a profession (that is, where the accounts were prepared on an earnings basis), a full valuation basis is provided in section 90 and sums received for the transfer of the work in progress are excluded from section 91 by subsection (2)(c) of that section.

(5) No deduction is allowed section 91(4) for post-cessation expenses, unutilised capital allowances and unrelieved losses, where that amount has previously been allowed under any other provisions of the Tax Acts.

A double deduction under section 91(4) is prevented. Where amounts are chargeable in different years of assessment, any deduction in respect of a loss or capital allowance is given in an earlier rather than a later year. Furthermore, a deduction in respect of a loss is not to be made in any year preceding that in which the loss is incurred.

Relevant Date: Finance Act 2021