Intangible fixed assets ― credits

By Tolley in association with Jackie Barker of Wells Associates

The following Corporation Tax guidance note by Tolley in association with Jackie Barker of Wells Associates provides comprehensive and up to date tax information covering:

  • Intangible fixed assets ― credits
  • The intangible fixed asset regime
  • Disposal of intangible fixed assets
  • Part disposals
  • Rollover relief
  • Groups of companies
  • Related parties

This note provides an overview of the rules that apply in relation to the disposal of an intangible fixed asset for corporation tax purposes. With effect from 1 April 2002, a corporate tax intangible taxation regime was introduced which changed the way in which any gains or losses arising from the sale of a company’s intangible fixed assets were charged to corporation tax for assets acquired or created after that date. This regime has been significantly amended to deny tax relief for impairment or amortisation charged on goodwill and other customer-related intangibles. Additional discussion on the tax treatment of intangibles assets generally and these changes may be found in the Corporate intangibles tax treatment guidance note. Further details on how losses on post-2002 intangible assets can be utilised is provided in the Losses on non-trade intangibles guidance note.

CTA 2009, ss 711–906 (Pt 8)
The intangible fixed asset regime

Intangible fixed assets that are acquired, created or internally generated after 31 March 2002 generally fall within the intangible fixed assets regime rather than the capital gains regime. Intangible fixed assets that were acquired or created before 1 April 2002 are taxed in accordance with the previous capital gains rules. See the Corporate chargeable gains guidance note for more details.

The definition of an intangible asset is the same as for accounting purposes, which can be found in FRS 102, s 18. Section 18 defines an intangible asset as ‘an identifiable non-monetary asset without physical substance’. This would include intellectual property items such as patents and trademarks as well as fungible assets such as agricultural quotas. For further details on the accounting for intangibles, see the Definition of intangibles guidance note. Goodwill is dealt with in FRS 102, s 19. Goodwill is measured at cost defined as the excess of the cost of the business over the acquirer’s interest in the net

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