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

CTA09/S900A

Structure of Chapter 16A

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

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

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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.

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Definitions

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

  • The meaning of 鈥榬elieving acquisition鈥�.听 See CIRD46100.
  • The meaning of 鈥榬elated party鈥�.听 See CIRD45105+ and CIRD46100.
  • The meaning of a 鈥榩re-FA 2002 asset鈥�.听 See CIRD11500+.
  • The meaning of 鈥榯he asset concerned鈥� and 鈥榯he other asset鈥� for the purpose of considering the second and third cases. 听See CIRD46060+.
  • The meaning of 鈥榬elevant other asset鈥� and 鈥榥otional deduction amount鈥� for the purpose of calculation the adjustment under CTA/S900F.听 See CIRD46090.

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Points to note

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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.听

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