Corporation Tax Act 2009 (c. 4)

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 15 U.K. Adjustments on change of accounting policy

Change of policy involving disaggregation U.K.

874 Original asset not subject to fixed-rate writing down U.K.

(1) This section and section 875 apply if—

(a) the change of accounting policy results in an intangible fixed asset of the company that was treated as one asset (“the original asset”) in the earlier period being treated as two or more assets (“the resulting assets”) in the later period,

(b) there is a difference (“the accounting difference”) between—

(i) the accounting value of the original asset at the end of the earlier period, and

(ii) the sum of the accounting values of the resulting assets at the beginning of the later period,

(c) no election under section 730 (writing down at fixed rate: election for fixed-rate basis) has been or is subsequently made in respect of the original asset, and

(d) no such election is subsequently made in respect of any of the resulting assets.

(2) If the accounting difference is an increase, a corresponding credit must be brought into account for tax purposes in the later period.

(3) If the accounting difference is a decrease, a corresponding debit must be brought into account for tax purposes in the later period.

(4) The credit or debit is—

where—

D is the accounting difference,

WDVE is the tax written-down value of the original asset at the end of the earlier period, and

AVE is the accounting value of that asset at the end of that period.

(5) But if subsection (2) applies the credit must not exceed—

(a) the sum of the debits brought into account for tax purposes in respect of the original asset before the later period, less

(b) the sum of the credits so brought into account.

(6) This section is subject to section 878 (exclusion of credits or debits brought into account under other provisions).