Where the cash basis is not being used (see ¶5505) and a trade is discontinued or, except as noted below, is deemed discontinued (see ¶6100ff.), any trading stock belonging to the trade at the time of discontinuance must be valued at market value at discontinuance.

However, if:

the stock is sold to a UK trader; and

the cost of it is deductible in computing the new trader’s profits,

then the value of the stock will be taken to be the price the trader paid for it.

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