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Part 20General calculation rules

Chapter 2Other general rules

Expenditure on research and development

1308Expenditure brought into account in determining value of intangible asset

(1)Subsection (2) applies if a company—

(a)incurs expenditure on research and development which is not of a capital nature, and

(b)brings the expenditure into account in determining the value of an intangible asset.

(2)The expenditure is not prevented from being allowed as a deduction in calculating for corporation tax purposes the company’s profits, just because it is brought into account as mentioned in subsection (1)(b).

(3)Subsection (2) applies, in particular, for the purposes of—

(a)section 87 (expenses of research and development), and

(b)Part 13.

(4)Subsection (5) applies if, in accordance with subsection (2), expenditure is both—

(a)brought into account in determining the value of an intangible asset, and

(b)allowed as a deduction in calculating profits.

(5)No deduction may be made in calculating for corporation tax purposes the profits of the company in respect of the writing down of so much of the value of the intangible asset as is attributable to the expenditure.

(6)Subsection (2) does not allow expenditure as a deduction in calculating a company’s profits for an accounting period so far as—

(a)a deduction has been made in respect of it in calculating the company’s profits for a previous accounting period, or

(b)the company has benefited from a tax relief in respect of it for a previous accounting period under Part 13.

(7)In this section—