Corporation Tax Act 2009 section 890

Fungible assets: application of section 858

Section 890 provides for separate pooling of fungible intangible assets so that acquisitions made on or after 1 April 2002 can qualify under the intangible fixed assets regime, even where the company already held assets of the same kind before that date.

• Fungible assets (such as milk quotas) held by the same person in the same capacity are normally treated as indistinguishable parts of a single asset under section 858, with acquisitions increasing and disposals reducing that single asset.
• Without special rules, any fungible assets acquired after 1 April 2002 that merely added to an existing holding would fail the time-based qualifying test in section 882, because they would be regarded as part of a pre-existing asset.
• Section 890 addresses this by requiring separate pools to be maintained for fungible assets, so that post-1 April 2002 additions are kept distinct from pre-existing holdings for the purposes of the intangible fixed assets rules.
• This separate pool approach ensures that expenditure on fungible assets acquired on or after 1 April 2002 can satisfy the qualifying conditions and come within the corporation tax intangible fixed assets regime.