Corporation Tax Act 2009 section 728

Expenditure written off as it is incurred

Section 728 provides a tax deduction for expenditure on intangible fixed assets that is written off in the period it is incurred, rather than being capitalised first.

• Expenditure on an intangible fixed asset that is written off in the profit and loss account as it is incurred gives rise to a corresponding tax debit
• The tax debit equals the accounting loss, subject to adjustments required by the intangible fixed assets rules or the transfer pricing provisions in Part 4 of TIOPA 2010
• The section does not apply where the expenditure was previously capitalised — it only covers expenditure that has never been treated as a capital cost
• Patent royalty restrictions under section 59 do not prevent a debit being claimed under this section