Part 8Intangible fixed assets

F1Chapter 15ADebits in respect of goodwill and certain other assets

Restrictions on debits: acquisition from individual or firm

879KRestrictions on debits: acquisition from individual or firm

(1)

This section applies in respect of a relevant asset of a company if—

(a)

the company acquires the asset on or after 1 April 2019 directly or indirectly from an individual or firm (“the transferor”),

(b)

the related party condition is met, and

(c)

the third party acquisition condition is not met.

(2)

The related party condition is met if—

(a)

in a case where the transferor is an individual, the transferor is a related party in relation to the company at the time of the acquisition;

(b)

in a case where the transferor is a firm, any individual who is a member of the transferor is a related party in relation to the company at that time.

(3)

The third party acquisition condition is met if—

(a)

in a case where the relevant asset is goodwill—

(i)

the transferor acquired all or part of the relevant business in one or more third party acquisitions as part of which the transferor acquired goodwill, and

(ii)

the relevant asset is acquired by the company as part of an acquisition of all the relevant business;

(b)

in a case where the relevant asset is not goodwill—

(i)

the transferor acquired the relevant asset in a third party acquisition, and

(ii)

the relevant asset is acquired by the company as part of an acquisition of all the relevant business.

(4)

No debits in respect of the asset are to be brought into account by the company for tax purposes under Chapter 3 (debits in respect of intangible fixed assets) or Chapter 15 (adjustments on change of accounting policy).

(5)

Any debit in respect of the asset that is brought into account by the company for tax purposes under Chapter 4 (realisation of intangible fixed assets) is treated for the purposes of Chapter 6 as a non-trading debit.

879LMeaning of relevant business and third party acquisition

(1)

This section applies for the purposes of section 879K(3).

(2)

“Relevant business” means—

(a)

in a case where the relevant asset is within paragraph (e) of subsection (2) of section 879A, the business or (as the case may be) the part of the business mentioned in the paragraph of that subsection within which the licensed asset falls, and

(b)

in any other case, the business or (as the case may be) the part of the business mentioned in the paragraph of that subsection within which the relevant asset falls.

(3)

The transferor acquires something in a “third party acquisition” if—

(a)

the transferor acquires it from a company (“C”) and, at the time of that acquisition—

(i)

if the transferor is an individual, the transferor is not a related party in relation to C, or

(ii)

if the transferor is a firm, no individual who is a member of the transferor is a related party in relation to C, or

(b)

the transferor acquires it from a person (“P”) who is not a company and, at the time of that acquisition—

(i)

if the transferor is an individual, P is not connected with the transferor, or

(ii)

if the transferor is a firm, no individual who is a member of the transferor is connected with P.

(4)

But an acquisition is not a “third party acquisition” if—

(a)

its main purpose, or one of its main purposes, is for any person to obtain a tax advantage (within the meaning of section 1139 of CTA 2010), or

(b)

it occurs during the period beginning with 8 July 2015 and ending with 31 March 2019.

(5)

In this section “connected” has the same meaning as in Chapter 12 (see section 842).