Losses on non-trade intangibles

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Losses on non-trade intangibles
  • Non-trade intangibles
  • Relief for non-trading loss on IFAs
  • Anti-avoidance rules on carried-forward NTLIFA
  • Targeted anti-avoidance rule (TAAR)

Non-trade intangibles

Debits arising in the accounts of the company in relation to intangible assets are, as a basic rule, treated as being allowable debits in the period in which they are charged. There are, however, restrictions on the allowable debits where the asset is goodwill or a customer-related intangible depending on the date of acquisition or creation. For more details, see the Goodwill and other customer-related intangible assets guidance note.

The tax treatment of debits and credits relating to intangible fixed assets (IFAs) is different depending on whether they relate to an asset used in a trade, a property business or for non-trading purposes.

Trading debits and credits relating to IFAs form part of trade profits as they are accrued to the profit and loss account.

CTA 2009, s 747

Debits and credits relating to IFAs of a property business are treated as part of the expense / income of that property business.

CTA 2009, s 748

Non-trading debits and credits relating to IFAs are pooled. If the non-trading credits exceed non-trading debits, then there is a non-trading gain on IFAs. This is chargeable to corporation tax as income. If non-trading debits exceed non-trading credits, then there is a non-trading loss on IFAs (NTLIFA).

CTA 2009, ss 751–752

Where there is a restriction on the relief for the debits relating to goodwill or customer-related intangible assets, any debit on realisation of the asset is treated as a non-trading debit.

CTA 2009, s 879I(4)
Relief for non-trading loss o

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