Finance Act 2002

Realisation of asset written down for tax purposes

20 (1) This paragraph applies where there is a realisation of an intangible fixed asset in respect of which debits have been brought into account for tax purposes—

(a) under paragraph 9 (writing down on accounting basis), or

(b) under paragraphs 10 and 11 (writing down at fixed rate).

(2) Where this paragraph applies—

(a) if the proceeds of realisation exceed the tax written down value of the asset, a credit equal to the excess shall be brought into account for tax purposes;

(b) if the proceeds of realisation are less than the tax written down value of the asset, a debit equal to the shortfall shall be brought into account for tax purposes; and

(c) if there are no proceeds of realisation, a debit equal to the tax written down value shall be brought into account for tax purposes.

(3) References in this paragraph to the tax written down value of an asset are to its tax written down value immediately before the realisation.