740Abortive expenditure on realisationU.K.
(1)This section applies if—
(a)in a period of account a loss is recognised in determining the company's profit or loss in respect of expenditure by the company for the purposes of a transaction,
(b)the transaction does not proceed to completion, but
(c)were it completed, it would constitute a realisation of an intangible fixed asset.
(2)A corresponding debit must be brought into account for tax purposes.
(3)The amount of the debit is the same as the amount of the loss recognised by the company for accounting purposes.
(4)Subsection (3) is subject to any adjustments required by this Part or [F1Part 4 of TIOPA 2010] (provision not at arm's length).
Textual Amendments
F1Words in s. 740(4) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 145(1), (2) (with Sch. 9 paras. 1-9, 22)