Corporation Tax Act 2010 section 357OO

Assets acquired in connection with disposals of pre-commencement assets

Section 357OO ensures that where a company acquires an intangible fixed asset as a result of, or in connection with, a disposal of a pre-commencement asset or an older non-intangible asset, the acquired asset retains its pre-commencement status.

• Where someone disposes of a pre-commencement intangible fixed asset, or any other asset created before the commencement day, and a company acquires an intangible fixed asset as a direct or indirect consequence of that disposal, the acquired asset is treated as a pre-commencement asset in the company's hands.
• A "disposal" for these purposes includes a part disposal or any other disposal under capital gains tax rules, a realisation of an intangible fixed asset under the intangible fixed assets regime, or the grant of a licence in respect of the asset.
• It does not matter whether the asset disposed of is the same asset as the one acquired, whether the acquisition happens at the same time as the disposal, or whether the acquired asset results from a merger of assets or any other process.
• The practical effect is to prevent companies from circumventing the pre-commencement rules by restructuring or replacing older assets with new intangible fixed assets — the replacement asset inherits the pre-commencement classification.