D1.629E Tax treatment of intangible debits and credits
The starting point for the debits and credits in respect of an intangible asset that are taken into account for tax are the accounting gains and losses (see D1.611), as adjusted for any tax or transfer pricing adjustments (see D1.614). The resulting intangible debits and credits are then brought into account for tax purposes depending on the purpose for which the asset is held, that is for trading or non-trading purposes; for a property business; or mines, transport undertakings etc1. Where an intangible asset is held for more than one purpose, an apportionment is made on a just and reasonable basis2.
If the asset is goodwill or certain customer-related intangible assets the relief for the relevant debits may be restricted depending on the date of acquisition or creation of the asset, for more details see D1.629A–D1.629C.
There is no requirement that debits are incurred wholly and exclusively for the purpose of the trade or business concerned, but assets held for non-commercial purposes or in respect of activities outside the charge to corporation tax are excluded from the definition of intangible fixed assets (see D1.603).
Debits and credits includes gains and losses on realisation (see D1.630), these gains and losses, which might under general principles be regarded as capital, are brought within the tax provisions relating to income.
Where a company's tax period of account differs from