Commentary

D1.603 Corporate intangible regime—excluded assets

Corporate tax
Corporate tax | Commentary

D1.603 Corporate intangible regime—excluded assets

Corporate tax | Commentary

D1.603 Corporate intangible regime—excluded assets

The corporate intangible regime applies to all intangible fixed assets, as set out in D1.602 however certain assets are expressly excluded1. Where an asset is excluded, an option or other right to acquire or dispose of such an asset is also excluded2.

There are three kinds of exclusion3:

  1.  

    •     assets entirely excluded

  2.  

    •     assets excluded except as regards royalties

  3.  

    •     assets excluded to a specified extent

When an asset is partially excluded, separate assets are deemed to exist within and outside the regime and any other corporation tax rules apply to the part deemed to be a separate asset outside the corporate intangible regime4. Any apportionment needed is made on a just and reasonable basis5.

For assets excluded except as regards royalties, the effect is to allow a company to bring royalties into account for tax purposes on the same basis as they are recognised in the company's accounts. This allows the simpler treatment of royalties afforded by the corporate intangible regime to be used even in cases where the underlying intangible asset is, for whatever reason, excluded from the regime.

Details of assets falling into each class of exclusion are set out in the commentary below.

Assets entirely excluded

Assets entirely excluded are:

  1.  

    •     rights over tangible assets

  2.  

    •     oil licences

  3.  

    •     financial assets

  4.  

    •     rights in companies, trusts etc

  5.  

    •     assets held for non-commercial purposes etc

  6.  

    •     assets which were previously treated as tangible assets in a company's accounts and in respect of which capital allowances have

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