SCHEDULES

SCHEDULE 29 U.K.Gains and losses of a company from intangible fixed assets

Modifications etc. (not altering text)

C1 Sch. 29 applied (with modifications) (15.8.2002) by S.I. 2002/1967, regs. 3-6

C2 Sch. 29 modified (5.10.2004) by Energy Act 2004 (c. 20), s. 198(2), Sch. 9 para. 28 (with s. 38(2)); S.I. 2004/2575, art. 2(1), Sch. 1

[F1 Part 13A U.K.Adjustment on change of accounting policy

Textual Amendments

F1 Sch. 29 Pt. 13A substituted for Sch. 29 para. 116A (7.4.2005) by Finance Act 2005 (c. 7), Sch. 4 para. 45

Change of accounting policy involving change of value U.K.

116B (1) If as a result of the change of accounting policy there is a difference between—

(a) the accounting value of an intangible fixed asset of the company at the end of the earlier period, and

(b) the accounting value of that asset at the beginning of the later period,

a corresponding debit or credit (as the case may be) shall be brought into account for tax purposes in the later period.

(2) Any such debit or credit is treated as arising at the beginning of the later period.

(3) The amount of the debit or credit to be brought into account for tax purposes is:

Accounting Difference x (Tax Value / Accounting Value)

where—

Accounting Difference is the amount of the difference specified in sub-paragraph (1);

Tax Value is the tax written down value of the asset at the end of the earlier period; and

Accounting Value is the accounting value of the asset at the end of that period.

(4) The tax written down value of the asset at the beginning of the later period shall be taken to be the tax written down value of the asset at the end of the earlier period, reduced by the amount of the debit or (as the case may be) increased by the amount of the credit brought into account for tax purposes under sub-paragraph (3).

(5) Subsequently—

(a) the cost recognised for tax purposes shall be taken to be the tax written down value given by sub-paragraph (4), together with the cost recognised for tax purposes of any subsequent expenditure on the asset that is capitalised for accounting purposes; and

(b) the tax written down value shall be determined taking account only of subsequent debits and credits.

(6) This paragraph does not apply to an asset in respect of which an election has been made under paragraph 10 (election for writing down at fixed-rate).

(7) This paragraph has effect subject to—

• paragraph 116F (cap on credit to be brought into account on change of accounting policy), and

• paragraph 116G (debits or credits brought into account under other provisions).]