Corporation Tax Act 2009 section 895

Assets acquired in connection with disposals of pre-FA 2002 assets

Section 895 ensures that when a pre-FA 2002 intangible asset is disposed of by a person to a related company before 1 July 2020, the acquired asset retains its pre-FA 2002 status and remains outside the intangible fixed assets corporation tax regime.

• Where a person disposes of a pre-FA 2002 asset and a related company acquires an intangible fixed asset directly or indirectly as a result of, or in connection with, that disposal before 1 July 2020, the acquired asset is treated as a pre-FA 2002 asset in the company's hands.
• This treatment applies regardless of whether the disposed asset and the acquired asset are the same asset, whether the acquisition happens at the time of disposal, or whether the asset is acquired by merging assets or by other means.
• The definition of "asset" and "disposal" follows the capital gains tax rules under the Taxation of Chargeable Gains Act 1992, including part disposals, and the timing of disposal is determined under those same rules.
• The related party test in section 882(5A) to (5D) applies for the purposes of this section, providing the detailed rules for determining when persons are related parties.