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Valuation of trading stock on discontinuance or transfer of trade or business

Income Tax Act 1947

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—(1) In computing for any purpose of this Act the gains or profits of a trade or business which has been discontinued or transferred, any trading stock belonging to the trade or business at the discontinuance or transfer thereof is valued as follows:(a)in the case of any such trading stock —(i)which is sold or transferred for valuable consideration to a person who carries on or intends to carry on a trade or business in Singapore; and(ii)the cost whereof may be deducted by the purchaser as an expense in computing for any such purpose the gains or profits of that trade or business,the value thereof is taken to be the amount realised on the sale or the value of the consideration given for the transfer; and(b)in the case of any other such trading stock, the value thereof is taken to be the amount which it would have realised if it had been sold in the open market at the discontinuance or transfer of the trade or business.(2) In computing for any purpose of this Act the gains or profits of the purchaser of the trading stock of any trade or business which has been discontinued or transferred, such trading stock is valued as provided in subsection (1).(3) Any question arising under subsection (1) regarding the value attributable to the trading stock belonging to any trade or business which has been discontinued or transferred is to be determined by the Comptroller.(4) In this section, “trading stock”, in relation to any trade or business, means property of any description, whether movable or immovable, being either —(a)property such as is sold in the ordinary course of trade or business or would be so sold if it were mature or if its manufacture, preparation or construction were complete; or(b)materials such as are used in the manufacture, preparation or construction of any such property as is referred to in paragraph (a).

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