Corporation Tax Act 2009

744 Effect of part realisation of asset

(1) The tax written-down value of an intangible asset that has been the subject of a part realisation is determined as follows.

(2) Immediately after the part realisation the tax written-down value of the asset is—

where—

• WDVB is the tax written-down value of the asset immediately before the part realisation,

• AVA is the accounting value of the asset immediately after the part realisation, and

• AVB is the accounting value immediately before the part realisation.

(3) Subsequently, the tax written-down value of the asset is determined in accordance with section 742 or 743, but subject to subsections (4) and (5).

(4) The cost of the asset recognised for tax purposes is the sum of—

(a) the tax written-down value in accordance with subsection (2), and

(b) the cost recognised for tax purposes of subsequent expenditure on the asset that is capitalised for accounting purposes.

(5) Only credits and debits brought into account for tax purposes after the part realisation are taken account of.

(6) If there is a further part realisation, subsections (1) to (5) apply again.

(7) If there is a subsequent change of accounting policy affecting the asset, Chapter 15 (adjustments on change of accounting policy) applies.