What does section 750 of the Corporation Tax Act 2009 require?

Section 750 requires a company to apportion credits and debits on a just and reasonable basis where an intangible fixed asset is held for more than one type of purpose as defined in sections 747 to 749. This applies where the asset serves trade, property business, or other qualifying purposes simultaneously, ensuring each category receives a fair allocation.

When is apportionment required under section 750 CTA 2009?

Apportionment is required in two situations: first, where an intangible fixed asset is held for purposes falling within more than one of sections 747 to 749 (such as trade and property business); and second, where the asset is held partly for purposes covered by those sections and partly for purposes falling entirely outside them.

How should a company carry out the apportionment under section 750?

The apportionment must be carried out on a just and reasonable basis. There is no prescribed formula. The company should examine the facts and allocate credits and debits in a way that fairly reflects the extent to which the intangible fixed asset is used for each purpose. The approach depends on the particular circumstances of the case.

Can you give an example of apportionment under section 750 CTA 2009?

If a company holds a licence used 60% for its trade and 40% for its property rental business with a £100,000 annual amortisation debit, section 750 requires apportionment on a just and reasonable basis. It would be reasonable to allocate £60,000 as a trading debit under section 747 and £40,000 as a property business debit under section 748.

Corporation Tax Act 2009 section 750

Assets held for purposes falling within more than one section

Section 750 requires a just and reasonable apportionment where an intangible fixed asset is held for more than one type of purpose, as defined in sections 747 to 749.

Sections 747 to 749 each set out different categories of purpose for which an intangible fixed asset may be held — for example, trade purposes, property business purposes, or purposes relating to mines and transport undertakings.
Where an asset is held for purposes falling within more than one of those categories, the credits and debits relating to the asset must be apportioned between them.
Similarly, where an asset is held partly for purposes covered by sections 747 to 749 and partly for purposes outside those sections, an apportionment is also required.
Any such apportionment must be carried out on a just and reasonable basis, reflecting the extent to which the asset serves each purpose.

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