Finance Act 2002

Application of Schedule to assets created or acquired after commencement

118 (1) Except as otherwise expressly provided, the provisions of this Schedule apply only to intangible fixed assets of a company (“the company”) that—

(a) are created by the company after commencement, or

(b) are acquired by the company after commencement from a person who at the time of the acquisition is not a related party in relation to the company, or

(c) are acquired by the company after commencement from a person who at the time of the acquisition is a related party in relation to the company in the cases specified in sub-paragraph (2).

As to when assets are regarded as created or acquired, see paragraphs 120 to 125.

(2) The cases mentioned in sub-paragraph (1)(c) in which this Schedule applies to assets acquired by the company after commencement from a related party are—

(a) where the asset is acquired from a company in relation to which the asset was a chargeable intangible asset immediately before the acquisition;

(b) where the asset is acquired from a person (“the intermediary”) who acquired the asset after commencement from a third person—

(i) who was not at the time of that acquisition a related party in relation to the intermediary or, where the intermediary was not a company, a company in relation to which the intermediary was a related party, and

(ii) who is not, at the time of the acquisition by the company, a related party in relation to the company;

(c) where the asset was created, whether by the person from whom it is acquired or any other person, after commencement.

(3) Intangible fixed assets to which, by virtue of sub-paragraph (1), this Schedule does not apply in the absence of express provision to that effect are referred to in this Schedule as “existing assets”.

(4) Sub-paragraph (1) has effect subject to—

(a) paragraph 126 (application of Schedule to fungible assets), and

(b) paragraph 127 (certain assets acquired on transfer of a business treated as existing assets).

(5) The following paragraphs contain provision for the application of this Schedule in relation to certain existing assets—

• paragraphs 128 and 129 (application of Schedule to certain existing assets);

• paragraphs 130 to 132 (application of roll-over relief in relation to certain existing assets).

(6) Nothing in this paragraph shall be read as restricting the application of this Schedule in accordance with paragraph 119 (application of Schedule to royalties).