Corporation Tax Act 2009 section 742

Asset written down on accounting basis

Section 742 explains how to calculate the tax written-down value of an intangible fixed asset where the asset is being written down using the accounting basis method.

• The tax written-down value equals the capitalised cost of the asset less the total net debits previously recognised for tax purposes
• The capitalised cost for tax purposes is the same as the amount capitalised in the accounts, subject to adjustments for non-arm's length transactions or other provisions in the intangible fixed assets regime
• Total net debits means total debits brought into account for tax less any credits brought into account for tax in respect of the same asset
• Special rules apply where the asset has been partly realised or where there has been a change of accounting policy