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Finance Act 2002

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This is the original version (as it was originally enacted).

Conditions to be met in relation to the old asset and its realisation

38(1)The following conditions must be met in relation to the old asset and its realisation—

(a)the asset must have been a chargeable intangible asset of the company throughout the period during which it was held by the company; and

(b)the proceeds of realisation of the asset must exceed—

(i)the cost of the asset, or

(ii)in the case of a part realisation, the appropriate proportion of the cost of the asset, or

(iii)in the case of the realisation of an asset that has been the subject of a part realisation, the adjusted cost of the asset.

(2)If the asset was a chargeable intangible asset of the company—

(a)at the time of its realisation, and

(b)for a substantial part of, but not throughout, the period during which it was held by the company,

a part of the asset representing the time for which it was a chargeable intangible asset shall be treated for the purposes of this Part as if it were a separate asset in relation to which the condition in sub-paragraph (1)(a) was wholly met.

Any apportionment necessary for this purpose shall be made on a just and reasonable basis.

(3)In sub-paragraph (1)(b) “the cost of the asset” means the total of the capitalised expenditure on the asset recognised for tax purposes.

For the calculation of the appropriate proportion or adjusted cost, see paragraph 42.

(4)The condition in sub-paragraph (1)(b) is necessarily met if the asset has no cost as defined above.

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