Corporation Tax

What is an intangible fixed asset?

Produced by Tolley
  • 09 Nov 2021 08:31

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

  • What is an intangible fixed asset?
  • Definition of an IFA
  • Understanding goodwill
  • Excluded assets
  • Assets expressly excluded from the definition of IFA
  • Assets excluded except as regards royalties
  • Assets partially excluded from the regime

What is an intangible fixed asset?

This guidance note considers the definitions of an ‘intangible fixed asset’ (IFA) for the purpose of the corporate intangibles regime. See the Corporate intangibles tax regime ― overview guidance note for a summary of the regime.

Definition of an IFA

IFAs are assets which are defined as intangible assets under GAAP which have a continuing use in the company’s activities. The accounting definition is set out in FRS 102, s 18 and defines an intangible asset as ‘an identifiable non-monetary asset without physical substance’.

For an asset to fall within the FRS 102 definition of an ‘intangible asset’, it must therefore be:

  1. non-financial

  2. a fixed asset (ie not held or acquired as trading stock)

  3. one with no physical substance

  4. capable of being identified, ie capable of being sold, licensed, rented or otherwise separated from the business with which it is associated, or otherwise arising from contractual or other legal rights

  5. an asset over which the company can exercise a degree of control, ie via a franchise, licence arrangement, patent, etc

The following assets are specifically included in the definition of IFAs for tax purposes:

  1. patents

  2. trademarks

  3. registered designs

  4. copyright or design right

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