How the relief is givenU.K.
758How the relief is given: generalU.K.
(1)A company that is entitled to relief under this Chapter is treated for the purposes of this Part as if—
(a)the proceeds of realisation of the old asset, and
(b)the cost recognised for tax purposes of acquiring the other assets,
were each reduced by the amount available for relief.
(2)If the qualifying expenditure on other assets equals or exceeds the proceeds of realisation of the old asset, the amount available for relief is the amount by which the proceeds of realisation exceed the cost of the old asset.
(3)If the qualifying expenditure on other assets is less than the proceeds of realisation of the old asset, the amount available for relief is the amount by which the qualifying expenditure on other assets exceeds the cost of the old asset.
(4)In this section “qualifying expenditure” means expenditure in relation to which the conditions in section 756 are met.
(5)In this section “the cost of the old asset” means the total capitalised expenditure on the asset recognised for tax purposes, but—
(a)in the case of a part realisation, references to the cost of the old asset are references to the appropriate proportion of the cost (see section 759(1) and (2)), and
(b)in the case of the realisation of an asset that has previously been the subject of a part realisation, references to the cost of the old asset are references to the adjusted cost (see section 759(3)).
(6)The relief does not affect the treatment of any other party to—
(a)any transaction involved in the realisation of the old asset, or
(b)the expenditure on the other assets,
for any purpose of the enactments relating to income tax, corporation tax or chargeable gains.
759Determination of appropriate proportion of cost and adjusted costU.K.
(1)In the case of a part realisation, any reference in section 755 or 758 to the appropriate proportion of the cost of the old asset is to the following proportion of it—
where—
AVB is the accounting value immediately before the part realisation, and
AVA is the accounting value immediately after the part realisation.
(2)If the old asset has previously been the subject of a part realisation, the reference in subsection (1) to the cost of the old asset is a reference to the adjusted cost.
(3)References in sections 755 and 758 and subsection (2) to the adjusted cost are references to the cost of the old asset, less the sum of the amounts given by subsections (1) and (2) in relation to earlier part realisations.
760References to cost of asset where asset affected by change of accounting policyU.K.
(1)In the case of an asset to which Chapter 15 has applied (adjustments on change of accounting policy) the references in this Chapter to the cost of the asset must be read as follows.
(2)If section 872 (adjustments in respect of change) applied, the references are unaffected.
(3)If section 874 or 876 (change of accounting policy involving disaggregation) applied, the references to the cost of the asset must be read as references to the appropriate proportion of that cost.
(4)For the purposes of subsection (3) the appropriate proportion is determined by applying to the cost of the asset the same fraction as is applied by section 875(2) or (3) or 876(3), as the case may be, to determine the tax written-down value of the asset after the change.
(5)References in this section to sections 872, 874, 875 and 876 include references to those provisions as applied by section 877 (election for fixed-rate writing down in relation to resulting asset).
761Declaration of provisional entitlement to reliefU.K.
(1)A company realising an intangible fixed asset may make a declaration of provisional entitlement to relief under this Chapter.
(2)While the declaration continues in force, this Chapter applies as if the conditions for relief under this Chapter were met.
(3)A declaration of provisional entitlement is a declaration by the company, in its company tax return for the accounting period in which the realisation takes place, that the company—
(a)has realised an intangible fixed asset,
(b)proposes to meet the conditions for relief under this Chapter, and
(c)accordingly is provisionally entitled to relief of a specified amount.
(4)A declaration of provisional entitlement ceases to have effect if or to the extent that—
(a)it is withdrawn, or
(b)it is superseded by a claim for relief under this Chapter.
(5)So far as not previously withdrawn or superseded, a declaration of provisional entitlement ceases to have effect 4 years after the end of the accounting period in which the realisation took place.
(6)If a declaration of provisional entitlement ceases to have effect, in whole or in part, all necessary adjustments must be made, by assessment or otherwise.
(7)Subsection (6) applies despite any limitation on the time within which assessments or amendments may be made.
762Realisation and reacquisitionU.K.
If a company realises an asset and subsequently reacquires it, this Chapter applies as if what is reacquired were a different asset from that previously realised.
763Disregard of deemed realisations and reacquisitionsU.K.
(1)This Chapter does not apply in relation to a realisation of an asset that does not actually occur but is treated as occurring, except as provided by—
(a)section 791 (application of roll-over relief in relation to degrouping charge), or
(b)section 794 (application of roll-over relief in relation to reallocated charge).
(2)Reacquisitions that do not actually occur but are treated as occurring are ignored for the purposes of this Chapter.