Finance Act 2002

Assets excluded to extent specified: election to exclude capital expenditure on computer software

83 (1) This paragraph applies to an intangible fixed asset held by a company to the extent that it represents capital expenditure by the company on computer software in respect of which the company has made an election under this paragraph.

(2) An insurance company that carries on life assurance business may also make an election under this paragraph in respect of so much of any capital expenditure on computer software as is not referable to its basic life assurance and general annuity business.

(3) The effect of an election under this paragraph is as follows—

(a) Part 2 does not apply to the asset, except for paragraph 12 (debit on reversal of previous accounting gain) so far as it relates to credits previously brought into account under paragraph 14 (receipts recognised as they accrue);

(b) Part 3 does not apply to the asset, except for paragraph 14;

(c) Part 4 (debits and credits on realisation of intangible fixed asset) applies as if the cost of the asset did not include any expenditure in respect of which an election under this paragraph has been made;

(d) a credit shall be brought into account under this Schedule in respect of the asset only to the extent that the receipts to which the credit relates do not fall to be taken into account in computing disposal values under section 72 of the Capital Allowances Act 2001 (c. 2).

(4) Any election under this paragraph must specify the expenditure to which it relates, and must be made—

(a) in writing,

(b) to the Inland Revenue,

(c) not more than two years after the end of the accounting period in which the expenditure was incurred.

(5) An election under this paragraph is irrevocable.

(6) The references in this paragraph—

(a) to capital expenditure, and

(b) to the time when such expenditure is incurred,

have the same meaning as if this paragraph were contained in the Capital Allowances Act 2001 (c. 2).