Corporation Tax Act 2009 section 863

Asset becoming chargeable intangible asset

Section 863 sets out the rules that apply when an intangible asset first comes within the UK corporation tax net, treating the company as having acquired the asset at its accounting value at that point.

• An asset becomes a chargeable intangible asset when a company becomes UK resident, when a non-UK resident company begins holding the asset for a UK permanent establishment, a UK land dealing or development trade, a UK property business, or to generate other UK property income, or when the asset ceases to be held for a mutual trade or business.
• The intangible fixed assets rules then treat the company as if it had acquired the asset immediately after it became chargeable, at its accounting value at that time.
• This deemed acquisition at accounting value establishes a base cost for future tax calculations, such as amortisation deductions or gains on disposal.
• The accounting value rule is subject to a specific override in section 863A, which may apply in certain EU exit-related situations.