Corporation Tax Act 2009 section 727

References to expenditure on an asset

Section 727 defines what counts as "expenditure on an asset" for the purposes of the intangible fixed assets regime, and explains how mixed-purpose spending should be apportioned.

• Expenditure on an asset includes any spending to acquire, create, maintain, preserve, enhance, or defend title to the asset, as well as royalties for its use — and even abortive expenditure counts.
• Capital expenditure on tangible assets (as defined in the Capital Allowances Act 2001) is excluded when calculating expenditure on an intangible asset.
• Where expenditure is incurred partly for qualifying purposes and partly for other purposes, it must be apportioned on a just and reasonable basis.
• The exclusion of tangible capital expenditure prevents items such as spending on cars used by staff promoting a brand name from being treated as expenditure on the intangible asset (the brand).