Corporation Tax Act 2009 section 889

Cases where capital allowances general rule applies

Section 889 establishes when expenditure on intangible assets is treated as incurred for the purposes of the pre-April 2002 transitional rules, where that expenditure would have qualified for capital allowances under the old law.

• This section applies where expenditure on creating or acquiring an asset qualified for capital allowances under CAA 2001 as the law stood before 1 April 2002
• For the transitional rules in section 883, such expenditure is treated as incurred at the point when an unconditional obligation to pay it arises
• The fact that payment is not due until a later date does not prevent the obligation from being unconditional
• A patent is an example of an asset that may fall within this rule, as patents could attract capital allowances before the intangible assets regime took effect