The following Corporation Tax guidance note Produced by Tolley in association with Anne Fairpo provides comprehensive and up to date tax information covering:
The basic rule is that the tax treatment of qualifying intangible fixed assets acquired or created on or after 1 April 2002 broadly follows the accounting treatment under generally accepted accounting practice (GAAP) (see below). This includes amortisation, royalties paid and received, revaluations, and reversals of previous gains and losses. Therefore, for trading intangible assets, the debits and credits in the financial statements will not need to be adjusted in the corporation tax computation. However, major restrictions apply for debits relating to goodwill and customer-related intangible assets depending on the date they were acquired or created, see the Goodwill and other customer-related intangible assets guidance note.
Where an asset was acquired or created before 1 April 2002, it is referred to as a ‘pre-FA 2002 asset’. Prior to 1 July 2020, pre-FA 2002 assets did not come within the scope of the corporate intangibles regime and instead were (in most cases) dealt with under the capital gains regime. However, for acquisitions made on or after 1 July 2020, any intangible asset acquired by a company will be taxed under the corporate intangibles regime, even if the asset was acquired from a related party. This rule is subject to the existing restrictions that apply to amortisation relief in respect of goodwill and customer-related assets. There are also transitional rules to counter avoidance where a pre-FA 2002 asset is acquired from a related party, which will restrict the tax relief for the acquiring company (see ‘Intangible assets and related parties’ below). In addition, the change in tax treatment for pre-FA 2002 assets from 1 July 2020 does not apply to transfers made between UK companies within the same capital gains group. The capital gains regime continues to apply to such transfers.
For information on which assets fall within the corporate intangibles regime, see the Definition of intangibles guidance note.
For details of a possible income tax charge that may arise on non-UK resident
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