Corporation Tax Act 2009 section 848A

Assets held for purposes of exempt foreign permanent establishments

Section 848A deals with how intra-group transfers of intangible fixed assets are valued when the asset has been partly used for the purposes of an exempt foreign permanent establishment.

• This section applies where an intra-group transfer of an intangible asset would normally qualify for tax-neutral treatment, but is excluded because the asset is held for the purposes of an exempt foreign permanent establishment
• The section only applies where the asset has not been held by the transferor wholly for exempt foreign permanent establishment purposes throughout the entire period the exemption election was in effect
• The transfer value is calculated as the tax written-down value of the asset plus the foreign permanent establishments amount that would be attributable to the transfer if it had been made at market value
• The foreign permanent establishments amount reflects the portion of the asset's value connected to the exempt foreign permanent establishment, ensuring that element is properly accounted for on transfer