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CTA09/S879A (2)

Definition of Relevant assets

The term 鈥榬elevant assets鈥� applies to goodwill and other types of intangible fixed assets that are commonly associated with goodwill, including those typically subsumed within goodwill under old UK GAAP (FRS10). This ensures that the new rules will apply to goodwill, and assets previously associated with goodwill, despite the relaxed recognition criteria in new UK GAAP (FRS102 s18 and IAS38). Without this provision many types of intangible fixed assets, not previously recognised as separate intangible fixed assets under old UK GAAP, would be eligible for unrestricted relief. The definition of 鈥榬elevant assets鈥� therefore ensures that these assets are treated the same as goodwill, whether or not a restriction applies. 鈥楻elevant assets鈥� include:

• Goodwill,
• Customer information of a business,
• Customer relationships (contractual and non-contractual) of a business,
• Unregistered trade mark or sign used in the business, and
• A licence in respect of the above.

If during the course of your work a company identifies an asset closely associated with goodwill, but which is not included in the list above, please notify one of the intangibles tax specialists in BAI.

CTA09/S879J

Definition of qualifying IP asset

The definition of 鈥榪ualifying IP asset鈥� is different to the definition of 鈥榠ntellectual property鈥� in CTA09/S712(3). In particular it omits trade marks (CTA09/S712(3)(a)) and information and techniques within (CTA09/S712(3)(c)).

The 鈥榪ualifying IP asset鈥� must be an intangible fixed asset and one that meets the following two conditions. The first condition is that it falls within the list at CTA09/S879J(2)(a) - (c). This includes:

• Patents, registered designs, copyright, design rights and plant breeders rights,
• A similar right under the law of a country or territory outside the UK, or
• A licence in respect of the above.

The second condition is that the asset must not be excluded from CTA09/PART8 by either the exclusions within CTA09/PART8/CHAPTER10 or the general rule in CTA09/PART8/CHAPTER16 (see CTA09/S897J(3)). This ensures that relief is only given in respect of a relevant asset by reference to qualifying IP assets to which the provisions of CTA09/PART8 apply. For example, a patent that is a pre-FA02 asset in the company鈥檚 hands is not a 鈥榪ualifying IP asset鈥� even though it meets the first condition.

Note that CTA09/S879J(1) requires that the 鈥榪ualifying IP asset鈥� is an 鈥榠ntangible fixed asset鈥�. Since the definition of 鈥榠ntangible asset鈥� includes intellectual property as defined in CTA09/S712(3) a 鈥榪ualifying IP asset鈥� will meet that definition but it must also be fixed, that is it must be used by the company on a continuing basis in the course of the company鈥檚 activities. 鈥淚ntangible fixed asset鈥� is defined in CTA09/S713 (see CIRD11170).

Computer software licences

Computer software licences are excluded from being qualifying IP where the licence does not permit the manufacture, adaptation or supply of the software (see CTA09/S879J(4)). This is intended to exclude a computer software end user licence.