Corporation Tax Act 2009 section 870A

Claims for relief made under sections 152 and 153 of TCGA 1992

Section 870A deals with what happens when a company claimed capital gains roll-over relief between 1 April 2009 and 19 March 2014, and the disposal proceeds were reinvested into an intangible fixed asset within Part 8 of the Corporation Tax Act 2009.

• Where a company claimed capital gains roll-over relief during 1 April 2009 to 19 March 2014 and reinvested the proceeds into a Part 8 intangible fixed asset, the tax cost of that asset is reduced by the amount of the roll-over relief claimed.
• The reduction is treated as taking effect on 19 March 2014, ensuring that all future Part 8 debits and credits properly reflect the relief already given under the capital gains rules.
• The adjustment cannot reduce the tax written-down value of the intangible asset below zero.
• The reduction must also be taken into account when calculating the tax written-down value of the asset in subsequent accounting periods, whether the asset is written down on an accounting basis or at a fixed rate.