Corporation Tax Act 2009 section 759

Determination of appropriate proportion of cost and adjusted cost

Section 759 explains how to calculate the proportion of cost attributable to an old intangible fixed asset when only part of that asset is realised, and how to adjust the cost figure when there have been earlier part realisations of the same asset.

• When only part of an intangible fixed asset is realised, the relevant proportion of cost is calculated as (AVB − AVA) ÷ AVB, where AVB is the accounting value immediately before and AVA is the accounting value immediately after the part realisation.
• This proportionate cost figure is then used in the roll-over relief conditions and relief calculation (under sections 755 and 758).
• If the old asset has already been subject to one or more earlier part realisations, the starting point is an "adjusted cost" rather than the original cost — this adjusted cost equals the original cost minus the amounts already attributed to those earlier part realisations.
• The formula therefore ensures that each successive part realisation only claims relief against the remaining unrelieved cost of the asset.