CIRD46020 - Intangible assets: special rules for restricted assets: overview of Chapter 16A

CTA09/S900A

Structure of Chapter 16A

 

CTA09/PART8/CHAPTER16A is split into three broad areas:

  • CTA09/S900B to 900D determine when an asset is a ‘restricted asset’ for the purpose of Chapter 16A.  See the more detailed guidance at CIRD46030 onwards which summarises the three cases.
  • CTA09/S900E and S900F determine the extent of the restriction in relation to a restricted asset.  See the guidance at CIRD46080 and CIRD46090.
  • CTA09/S900G to 900I contain important supplementary provisions. These include the meaning of ‘relieving acquisition’ and when two persons are regarded as related.  See CIRD46100.

 

The main policy design elements for restricting relief for restricted assets are to:

  • limit opportunities to gain a tax advantage where related parties acquire pre-FA 2002 assets on or after 1 July 2020, by
  • restricting relief under Chapters 3 and 15 by reference to the acquisition cost.

 

Definitions

 

When reading this section of the guidance you should familiarise yourself with the following defined terms:

  • The meaning of ‘relieving acquisition’.  See CIRD46100.
  • The meaning of ‘related party’.  See CIRD45105+ and CIRD46100.
  • The meaning of a ‘pre-FA 2002 asset’.  See CIRD11500+.
  • The meaning of ‘the asset concerned’ and ‘the other asset’ for the purpose of considering the second and third cases.  See CIRD46060+.
  • The meaning of ‘relevant other asset’ and ‘notional deduction amount’ for the purpose of calculation the adjustment under CTA/S900F.  See CIRD46090.

 

Points to note

 

To determine whether an asset is a pre-FA 2002 asset for the purposes of CTA09/PART8/CHAPTER16A you will need to reference the general rule at CTA09/S882 as it applies from 1 July 2020. 

Depending on the type of transaction, you may have to apply this definition to either ‘the asset concerned’ or to ‘the other asset’.  For example, if a licence is granted (‘the asset concerned’), you will need to consider whether the licensed asset (‘the other asset’) is a pre-FA 2002 asset at the time the licence is acquired.