C2C6C5C7C9C4C8Part 8Intangible fixed assets
Pt. 8 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)
Pt. 8 modified (1.10.2011) by Postal Services Act 2011 (c. 5), s. 93(2)(3), Sch. 2 para. 6(1); S.I. 2011/2329, art. 3
Pt. 8 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 1(3); S.I. 2012/628, art. 3(b)
Pt. 8 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 3(1); S.I. 2011/2576, art. 5
Pt. 8 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)
Pt. 8 modified (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 35, 45 (with Sch. 5 para. 36)
Chapter 6How credits and debits are given effect
Introductory
745Introduction
1
Credits and debits to be brought into account for tax purposes under this Part are given effect in accordance with this Chapter.
2
Credits and debits in respect of assets held for the purposes mentioned in any of the following sections are given effect in accordance with that section—
a
section 747 (assets held for purposes of trade),
b
section 748 (assets held for purposes of property business),
c
section 749 (assets held for purposes of mines, transport undertakings, etc).
3
Credits and debits in respect of intangible fixed assets that are not within sections 747 to 749 are dealt with in accordance with sections 751 to 753.
4
This section is subject to section 901 (effect of application of the I minus E basis: non-trading amounts).
746“Non-trading credits” and “non-trading debits”
1
In this Part credits and debits in respect of intangible fixed assets that are not within sections 747 to 749 are referred to respectively as “non-trading credits” and “non-trading debits”.
2
See also—
a
section 781(5) (character of credits and debits brought into account as a result of section 780),
F6b
section 793A (effect of election to reallocate charge within group),
F3ba
sections 879C(3), 879I(3), 879K(5) and 879O(3)(b) (debits in respect of goodwill and certain other assets treated as non-trading debits), and
c
F8section 901 (insurance companies: effect of application of the I minus E basis: non-trading amounts).
Trading etc credits and debits
747Assets held for purposes of trade
1
This section applies if credits or debits are to be brought into account in an accounting period in respect of an asset held by a company for the purposes of a trade carried on by it in that period.
2
The credits are given effect by treating them as receipts of the trade in calculating the profits of the trade for tax purposes.
3
The debits are given effect by treating them as expenses of the trade in calculating the profits of the trade for tax purposes.
748Assets held for purposes of property business
1
This section applies if credits or debits are to be brought into account in an accounting period in respect of an asset held by a company for the purposes of a property business carried on by it in that period.
2
The credits are given effect by treating them as receipts of the business in calculating the profits of the business for tax purposes.
3
The debits are given effect by treating them as expenses of the business in calculating the profits of the business for tax purposes.
4
In subsection (1) “property business” means—
F7a
an ordinary UK property business,
b
a UK furnished holiday lettings business,
c
an ordinary overseas property business, or
d
an EEA furnished holiday lettings business.
F55
In this section—
“commercial letting of furnished holiday accommodation” has the meaning given by section 265,
“EEA furnished holiday lettings business” means an overseas property business so far as it consists of the commercial letting of furnished holiday accommodation in one or more EEA states,
“ordinary overseas property business” means an overseas property business except so far as it is an EEA furnished holiday lettings business,
“ordinary UK property business” means a UK property business except so far as it is a UK furnished holiday lettings business, and
“UK furnished holiday lettings business” means a UK property business so far as it consists of the commercial letting of furnished holiday accommodation.
749Assets held for purposes of mines, transport undertakings, etc
1
This section applies if credits or debits are to be brought into account in an accounting period in respect of an asset held by a company for the purposes of a concern listed in section 39(4) (mines, quarries and other concerns) that is carried on by it in that period.
2
The credits are given effect by treating them as receipts of the concern in calculating the profits of the concern under Part 3 (trading income).
3
The debits are given effect by treating them as expenses of the concern in calculating the profits of the concern under that Part.
750Assets held for purposes falling within more than one section
If an asset is held—
a
for purposes falling within more than one of sections 747 to 749, or
b
for purposes falling within one or more of those sections and for purposes not so falling,
any necessary apportionment must be made on a just and reasonable basis.
Non-trading credits and debits
751Non-trading gains and losses
1
If there are non-trading credits or debits in an accounting period in respect of intangible fixed assets, the company's non-trading gain or loss on such assets in the period must be calculated.
2
There is a non-trading gain on intangible fixed assets in an accounting period if subsection (3) or (4) applies.
3
If in the accounting period—
a
there are non-trading credits, but
b
there are no non-trading debits,
there is a non-trading gain on intangible fixed assets equal to the sum of the credits.
4
If in the accounting period—
a
there are both non-trading credits and non-trading debits, and
b
the total non-trading credits exceed the total non-trading debits,
there is a non-trading gain on intangible fixed assets equal to the excess.
5
There is a non-trading loss on intangible fixed assets in an accounting period if subsection (6) or (7) applies.
6
If in the accounting period—
a
there are non-trading debits, but
b
there are no non-trading credits,
there is a non-trading loss on intangible fixed assets equal to the sum of the debits.
7
If in the accounting period—
a
there are both non-trading credits and non-trading debits, and
b
the total non-trading debits exceed the total non-trading credits,
there is a non-trading loss on intangible fixed assets equal to the excess.
8
For the treatment of non-trading gains and losses see—
a
section 752 (charge to tax on non-trading gains on intangible fixed assets), and
b
section 753 (treatment of non-trading losses).
752Charge to tax on non-trading gains on intangible fixed assets
The charge to corporation tax on income applies to non-trading gains arising to a company on intangible fixed assets.
C10C1C3753Treatment of non-trading losses
1
A company that has a non-trading loss on intangible fixed assets for an accounting period may claim to have the whole or part of the loss set off against the company's total profits for that period.
2
Such a claim must be made—
a
not later than the end of the period of 2 years immediately following the end of the accounting period to which it relates, or
b
within such further period as an officer of Revenue and Customs may allow.
3
To the extent that the loss is notF4, in any period (“the reference period”)—
a
set off against total profits on a claim under subsection (1), or
b
surrendered by way of group relief F1under Part 5 of CTA 2010,
it is carried forward to the next accounting period of the company and treated as if it were a non-trading F9loss on intangible fixed assets for that period.
F24
But subsection (3) does not apply if the company ceased to be a company with investment business in the reference period.
5
In the application of subsection (3) to an amount of a loss previously carried forward under that subsection, the reference in paragraph (b) to group relief under Part 5 of CTA 2010 is to be read as a reference to group relief for carried-forward losses under Part 5A of that Act.
6
In this section “company with investment business” has the same meaning as in Part 16 (see section 1218B).
Pt. 8 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 6(1)