Corporation Tax Act 2009 section 863A

Asset becoming chargeable intangible asset: EU exit charge

Section 863A deals with the tax treatment of an intangible asset that becomes chargeable to UK corporation tax when a company also faces an exit charge imposed by an EU member state.

• Applies where an intangible asset becomes chargeable to UK corporation tax because the company or the asset enters the UK tax net, and an EU member state simultaneously imposes an exit charge on the same asset.
• The company is treated as having acquired the asset at its market value at the time it became a chargeable intangible asset, establishing a fresh tax base for UK purposes.
• This market value treatment ensures the company is not taxed in the UK on gains that have already been subject to an EU exit charge, preventing double taxation.
• An "EU exit charge" is defined as a tax charge levied by an EU member state under Article 5(1) of the EU Anti-Tax Avoidance Directive (2016/1164), which allows member states to tax unrealised gains when assets leave their tax jurisdiction.