Assets whose value derives from existing assets treated as existing assetsU.K.
[F1127A(1)This paragraph applies where—
(a)a company acquires an intangible fixed asset (“the acquired asset”) after commencement from a person (“the transferor”) who at the time of the acquisition is a related party in relation to the company,
(b)the acquired asset is created, whether by the transferor or any other person, after commencement,
(c)the value of the acquired asset derives in whole or in part from any other asset (“the other asset”),
(d)the other asset has not at any time on or after 5th December 2005 been a chargeable intangible asset in the hands of the company or a related party in relation to the company or the transferor, and
(e)the existing asset condition is met.
(2)The existing asset condition is that, after commencement,—
(a)the other asset has been an existing asset in the hands of the transferor at a time when the transferor was a related party in relation to the company, or
(b)the other asset has been an existing asset in the hands of any other person at a time when the other person was a related party in relation to the company or the transferor.
(3)Where this paragraph applies the acquired asset shall be treated for the purposes of this Schedule as an existing asset in the hands of the company, but only so far as its value derives from the other asset.
(4)If only part of the value of the acquired asset so derives—
(a)this Schedule has effect as if there were a separate asset representing the part of the value not so derived, and
(b)the enactments that apply where this Schedule does not apply have effect as if there were a separate asset representing the part of the value so derived.
Any apportionment necessary for this purpose shall be made on a just and reasonable basis.
(5)For the purposes of this paragraph the cases in which the value of an asset may be derived from any other asset include any case where—
(a)assets have been merged or divided,
(b)assets have changed their nature, or
(c)rights or interests in or over assets have been created or extinguished.
(6)For the purposes of this paragraph the time at which an asset is created or acquired is the time at which it would be regarded as created or acquired for the purposes of paragraph 118 (application of Schedule to assets created or acquired after commencement).]
Textual Amendments
F1Sch. 29 paras. 127A, 127B inserted (with effect in accordance with s. 77(10)(11) of the amending Act) by Finance Act 2006 (c. 25), s. 77(8)