Corporation Tax Act 2009 section 736

Asset shown in balance sheet and not written down for tax purposes

Section 736 sets out how to calculate the taxable credit or allowable debit when a company disposes of an intangible fixed asset that appears in its balance sheet but has not previously been written down for tax purposes.

• Where disposal proceeds exceed the asset's capitalised cost, the excess is a taxable credit; where proceeds fall short, the shortfall is an allowable debit; where there are no proceeds at all, the full cost is an allowable debit
• The cost of the asset for tax purposes equals the expenditure capitalised in the company's accounts, subject to any adjustments required by Part 8 of CTA 2009 or the transfer pricing rules in Part 4 of TIOPA 2010
• This section applies only to intangible fixed assets that have not already been written down for tax purposes under section 735 — for example, assets sold shortly after acquisition
• Where the asset has previously been partly disposed of, the cost used on the subsequent full or further partial disposal is the accounting value immediately after the earlier part disposal plus any later capitalised expenditure, each recognised for tax purposes