Part 8 U.K.Intangible fixed assets

Modifications etc. (not altering text)

C1 Pt. 8 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 6(1)

C2 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)

C3 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

C4 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)

C5 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

C6 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)

C7 Pt. 8 modified (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 35, 45 (with Sch. 5 para. 36)

Chapter 13 U.K.Transactions between related parties

[F1 Grants treated as being at market value U.K.

Textual Amendments

F1 Ss. 849AB-849AD and cross-heading inserted (with application in accordance with s. 21(3) of the amending Act) by Finance Act 2018 (c. 3), s. 21(2)

849AB Grant of licence or other right treated as at market value U.K.

(1) This section applies if—

(a) a company which holds an intangible asset grants a licence or other right in respect of the asset to a related party, or

(b) a company is granted a licence or other right in respect of an intangible asset by a related party that holds the asset.

(2) The grant of the licence or other right is treated for all purposes of the Taxes Acts as being at market value as respects the grantor if—

(a) the licence or other right was actually granted at less than market value, and

(b) condition A or B is met.

(3) The grant of the licence or other right is treated for all purposes of the Taxes Acts as being at market value as respects the grantee if—

(a) the licence or other right was actually granted at more than market value, and

(b) condition A or B is met.

(4) Condition A is that the asset is a chargeable intangible asset in relation to the grantor immediately before the licence or right in respect of it is granted.

(5) Condition B is that the licence or right is a chargeable intangible asset in relation to the grantee immediately after it is granted.

(6) This section is subject to—

(a) section 849AC (grants not at arm's length), F2 ...

(b) section 849AD (grants involving other taxes)[F3 , and

(c) section 900F (special rules in respect of assets that were pre-FA 2002 assets etc)].

(7) References in subsection (1) to a related party in relation to a company are to be read as including references to a person in circumstances where the participation condition is met as between that person and the company.

(8) References in subsection (7) to a company include a firm in a case where, for the purposes of section 1259, references in subsection (1) to a company are read as references to the firm.

(9) Section 148 of TIOPA 2010 (when the participation condition is met) applies for the purposes of subsection (7) as it applies for the purposes of section 147(1)(b) of TIOPA 2010.

(10) Subsection (11) applies where—

(a) a gain on the grant by a firm of a licence or other right in respect of an intangible fixed asset is a gain to be taken into account for the purposes of section 1259, and

(b) for those purposes, references in subsection (1) to a company are read as references to the firm.

(11) Where this subsection applies, the gain referred to in subsection (10)(a) is to be treated for the purposes of this section as if it were a chargeable realisation gain for the purposes of section 741(1) (meaning of “chargeable intangible asset”).

(12) In this section—

• “market value” means the price the licence or right might reasonably be expected to fetch on a sale in the open market, and

• “the Taxes Acts” means the enactments relating to income tax, corporation tax or chargeable gains.]

Textual Amendments

F2 Word in s. 849AB(6)(a) omitted (with effect in accordance with s. 31(14)(15) of the amending Act) by virtue of Finance Act 2020 (c. 14), s. 31(4)(a)

F3 S. 849AB(6)(c) and word inserted (with effect in accordance with s. 31(14)(15) of the amending Act) by Finance Act 2020 (c. 14), s. 31(4)(b)