Corporation Tax Act 2009 section 888

Cases where chargeable gains rule applies

Section 888 provides an exception to the general timing rule for pre-April 2002 assets, ensuring that certain acquisition expenditure which never qualified for income tax relief is treated as pre-April 2002 expenditure when the related disposal also falls before that date.

• This section applies where expenditure on acquiring an asset (such as goodwill) did not qualify for any form of tax relief against income under the law as it stood before 1 April 2002.
• Although the general timing rule in section 887 would treat the expenditure as incurred on or after 1 April 2002, this section overrides that result in specific circumstances.
• The override applies where the disposal from which the acquisition arose is treated as occurring before 1 April 2002 for capital gains tax purposes (or would have been so treated under the pre-April 2002 law).
• Where all conditions are met, the expenditure is treated as incurred before 1 April 2002, meaning the intangible fixed assets regime does not apply and the asset remains within the chargeable gains rules.