Section 879K Restrictions on debits: acquisition from individual or firmF1

(1)

This section applies in respect of a relevant asset of a company if—

(a)

the company acquires the asset on or after 1 April 2019 directly or indirectly from an individual or firm (“the transferor”),

(b)

the related party condition is met, and

(c)

the third party acquisition condition is not met.

(2)

The related party condition is met if—

(a)

in a case where the transferor is an individual, the transferor is a related party in relation to the company at the time of the acquisition;

(b)

in a case where the transferor is a firm, any individual who is a member of the transferor is a related party in relation to the company at that time.

(3)

The third party acquisition condition is met if—

(a)

in a case where the relevant asset is goodwill—

(i)

the transferor acquired all or part of the relevant business in one or more third party acquisitions as part of which the transferor acquired goodwill, and

(ii)

the relevant asset is acquired by the company as part of an acquisition of all the relevant business;

(b)

in a case where the relevant asset is not goodwill—

(i)

the transferor acquired the relevant asset in a third party acquisition, and

(ii)

the relevant asset is acquired by the company as part of an acquisition of all the relevant business.

(4)

No debits in respect of the asset are to be brought into account by the company for tax purposes under Chapter 3 (debits in respect of intangible fixed assets) or Chapter 15 (adjustments on change of accounting policy).

(5)

Any debit in respect of the asset that is brought into account by the company for tax purposes under Chapter 4 (realisation of intangible fixed assets) is treated for the purposes of Chapter 6 as a non-trading debit.

Annotations

Textual amendments

F1: Pt. 8 Ch. 15A inserted (with effect in accordance with Sch. 9 para. 7 of the amending Act) by Finance Act 2019 (c. 1), Sch. 9 para. 6

Notes on Part 8

Modifications

C1: Pt. 8 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 6(1)
C2: Pt. 8 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)
C3: Pt. 8 modified (1.10.2011) by Postal Services Act 2011 (c. 5), s. 93(2)(3), Sch. 2 para. 6(1); S.I. 2011/2329, art. 3
C4: Pt. 8 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 1(3); S.I. 2012/628, art. 3(b)
C5: Pt. 8 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 3(1); S.I. 2011/2576, art. 5
C6: Pt. 8 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)
C7: Pt. 8 modified (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 35, 45 (with Sch. 5 para. 36)