Corporation Tax Act 2009 section 875

Effect of application of section 874 in later period and subsequently

Section 875 explains how the adjustment credit or debit determined under section 874 is applied in practice, including how to calculate the tax written-down value of each resulting asset and what happens going forward.

• The adjustment credit or debit under section 874 is treated as arising at the beginning of the later accounting period (the "relevant time")
• Each resulting asset's tax written-down value at the relevant time is calculated by adjusting the original asset's written-down value for the credit or debit, then apportioning by relative accounting values
• After the relevant time, the cost recognised for tax purposes for each resulting asset is its calculated tax written-down value plus any subsequent capitalised expenditure
• After the relevant time, the tax written-down value of each resulting asset is determined by reference only to subsequent credits and debits