Corporation Tax Act 2009 section 738

Asset not shown in balance sheet

Section 738 deals with how to calculate the taxable credit when a company realises an intangible fixed asset that has never appeared in its balance sheet.

• This section applies where an intangible fixed asset is realised but has never been recognised in the company's balance sheet
• It covers situations where neither the rules for assets written down for tax purposes (section 735) nor the rules for assets shown in the balance sheet but not written down for tax (section 736) apply
• The most common example of such an asset is internally-generated goodwill, which is not typically recognised on the balance sheet under accounting standards
• The entire proceeds of realisation must be brought into account as a taxable credit