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TAXGUIDE

TAXguide 19/20: Intangible fixed assets and corporation tax deductibility

Technical release

Published: 18 Dec 2020 Update History

This TAXguide, written by Andrew Tall, explains the different ways that a revenue deduction can be claimed for ‘typical’ intangible fixed assets (ITFA) used by a company in a taxable business, as introduced in Finance Act 2002 under Chs 3 and 15, Pt 8, Corporation Tax Act 2009 (CTA 2009), and subsequently amended.

Deductions for goodwill and other relevant assets in particular vary with acquisition date and this TAXguide includes the restrictive changes from 2014 and 2015, and fixed rate relief from 2019 for business acquisitions involving ‘qualifying IP assets’.

Amendments introduced by Finance Act 2020 (FA 2020) bring ITFA created prior to April 2002 into the ITFA regime when acquired from related parties on or after 1 July 2020, but limit deductions on these restricted assets.

Contents

  1. Introduction
  2. Pre-2002 regime: tax treatment of debits and credits 
  3. ITFA regime: tax treatment of debits and credits
  4. Relevant assets: tax treatment of debits and credits between 2014-2019 
  5. ‘Relevant assets’ acquired post 1 April 2019 
  6. FA 2020 ‘Restricted assets’
  7. Dates that ITFA are created 
  8. ITFA and Accounting standards 
  9. Suggestions 

Appendix 1: Examples of tax classification of ITFA 

Appendix 2: Tax treatment depending on acquisition date 

Appendix 3: Examples of the restricted asset legislation 

This TAXguide updates and replaces TAXguide 05/19.

TAXguide 19/20

PDF (319kb)

Tax Faculty members can download this guidance in full.

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