Corporation Tax Act 2009 section 879E

Pre-FA 2019 relevant asset: the second case

Section 879E defines the second scenario in which an intangible asset is classified as a "pre-FA 2019 relevant asset", focusing on assets transferred between related parties that were originally subject to the goodwill restriction introduced in 2015.

• An intangible asset is caught by this rule if another company acquired or created it between 8 July 2015 and 31 March 2019, held it as a chargeable intangible asset at some point between 29 October 2018 and 31 March 2019, and then it was acquired on or after 1 April 2019 by the current holder from a related party.
• The first exception (Case A) disapplies the rule where the asset was acquired from a company within the charge to corporation tax and the asset was not itself a pre-FA 2019 relevant asset in that company's hands immediately before the transfer.
• The second exception (Case B) disapplies the rule where the asset passed through an intermediary who had acquired it on or after 1 April 2019 from an unrelated third party, provided that third party is also unrelated to the acquiring company at the time of its acquisition.
• The definition of "related party" is extended to include situations where the participation condition under section 148 of TIOPA 2010 is met, and these rules also apply where a firm is involved for the purposes of allocating partnership profits or losses under section 1259.