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In cases where trades cease, a special method of valuing the trading stock is prescribed by the tax legislation¹. Further rules apply when trading profits are calculated on the cash basis and the relevant trade comes to an end (see below).

In the case of trades carried on by partners, it is provided for income tax purposes that, if there is a change in the persons carrying on the trade, no valuation of the stock is required by this method as long as a person carrying on the trade immediately before the change continues to carry it on after the change². For corporation tax purposes this method does not apply where there is a company carrying on the trade in partnership before and after the change³.

This special rule does not apply for income tax purposes where a trade, which had been carried on by a single individual, has ceased because of the individual's death⁴. In those circumstances the value of stock or work in progress