Taxation (International and Other Provisions) Act 2010 section 56

Non-trading debits on intangible fixed assets

Section 56 allows a company to allocate non-trading debits arising from intangible fixed assets against its profits for the purposes of calculating the double taxation relief credit limit, where it also has non-trading credits eligible for such relief.

• The section applies when a company has at least one non-trading credit from intangible fixed assets that is eligible for double taxation relief in the accounting period.
• The company may allocate a portion of its non-trading debits against its profits for the period, in whatever manner it considers appropriate, for the purpose of computing the credit relief limit under section 42.
• The amount available for allocation is the total non-trading debits for the period minus any amount carried forward to the next accounting period as a non-trading loss (i.e. amounts not claimed against current period profits and not surrendered as group relief).
• A non-trading credit is eligible for double taxation relief if foreign tax has been paid on the related item and credit for that foreign tax is allowable under a double taxation arrangement against UK tax on that item.