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(1)This Chapter provides for relief if a company realises an intangible fixed asset and incurs expenditure on other intangible fixed assets.
(2)In this Chapter references to the “old asset” are references to the asset that is realised and references to “other assets” are references to the other assets on which expenditure is incurred.
(3)A company is entitled to relief under this Chapter only if—
(a)the conditions in section 755 are met in relation to the old asset and its realisation,
(b)the conditions in section 756 are met in relation to the expenditure on other assets, and
(c)the company claims the relief in accordance with section 757.
(4)See also the following provisions (which extend or restrict the circumstances in which relief is available)—
(a)sections 777 to 779 (application of roll-over relief where there is reinvestment by group members),
(b)section 791 (application of roll-over relief in relation to degrouping charge),
(c)section 794 (application of roll-over relief in relation to reallocated charge),
(d)section 850 (part realisation involving related party acquisition: exclusion of roll-over relief), and
(e)sections 898 and 899 (roll-over relief for disposals of pre-FA 2002 assets).
(1)The old asset must have been a chargeable intangible asset of the company throughout the period during which it was held by the company (but see subsection (5)).
(2)The proceeds of realisation of the old asset must exceed—
(a)the cost of the asset,
(b)in the case of a part realisation, the appropriate proportion of the cost of the asset (see section 759(1) and (2)), or
(c)in the case of the realisation of an asset that has previously been the subject of a part realisation, the adjusted cost of the asset (see section 759(3)).
(3)In subsection (2) “the cost of the asset” means the total capitalised expenditure on the asset recognised for tax purposes.
(4)The condition in subsection (2) is met if the old asset has no cost as defined in subsection (3).
(5)Subsection (6) applies if the old asset was a chargeable intangible asset of the company—
(a)at the time of its realisation, and
(b)for a substantial proportion of the period during which it was held by the company, but not for the whole of that period.
(6)The same proportion of the asset is treated for the purposes of this Chapter as if it were a separate asset in relation to which the condition in subsection (1) was wholly met.
(7)Any apportionment necessary for the purposes of subsections (5) and (6) must be made on a just and reasonable basis.
(1)The expenditure on other assets must be incurred in the period—
(a)beginning 12 months before the date of realisation of the old asset or at such earlier time as an officer of Revenue and Customs may by notice allow, and
(b)ending 3 years after the date of realisation of the old asset or at such later time as an officer of Revenue and Customs may by notice allow.
(2)The expenditure on other assets must be capitalised by the company for accounting purposes.
(3)Immediately after the expenditure is incurred the other assets must be chargeable intangible assets in relation to the company.
(4)For the purposes of this section expenditure is treated as incurred when it is recognised for accounting purposes.
A claim by a company for relief under this Chapter must specify—
(a)the old assets to which the claim relates,
(b)the amount of the relief claimed in relation to each old asset, and
(c)in relation to each old asset, the expenditure on other assets by reference to which relief is claimed.
(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.
(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.
(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).
(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.
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.
(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.
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