Corporation Tax Act 2010 section 357OM

Assets whose value derives from pre-commencement assets

Section 357OM prevents tax relief under the Northern Ireland intangible fixed assets regime from being claimed on assets that are not genuinely new, by treating newly created assets as pre-commencement assets to the extent their value derives from older assets.

• Where a company acquires a newly created intangible fixed asset whose value derives wholly or partly from an older asset that meets the pre-commencement status conditions, the acquired asset is treated as a pre-commencement asset to that extent
• If only part of the acquired asset's value derives from the older asset, the asset is split into two notional assets: a pre-commencement portion and a post-commencement portion
• Value derivation includes situations where assets have been merged, divided, changed in nature, or where rights or interests in assets have been created or extinguished
• The pre-commencement status conditions that the older asset must satisfy are set out in section 357ON, which supplements this section