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Section 879M When the partial restrictions apply: qualifying IP assetsF1

(1)

Section 879O (the partial restrictions on debits) applies in respect of a relevant asset (“the asset concerned”) of a company if—

(a)

the company acquires the asset concerned on or after 1 April 2019 as part of the acquisition of a business,

(b)

the company also acquires qualifying IP assets as part of the acquisition of the business for use on a continuing basis in the course of the business, and

(c)

the amount in subsection (3) is less than 1.

(2)

But section 879O does not apply in respect of the asset concerned if either of the following sections applies in respect of it—

(a)

section 879C (restrictions on debits: pre-FA 2019 relevant assets);

(b)

section 879K (restrictions on debits: acquisition from individual or firm).

(3)

The amount is—

A × N B

where—

A is the expenditure incurred by the company for or in connection with the acquisition of the qualifying IP assets mentioned in subsection (1)(b),

B is the expenditure incurred by the company for or in connection with the acquisition of the asset concerned and any other relevant assets acquired with the business, and

N is 6.

(4)

The Treasury may by regulations amend the meaning of N.

(5)

In this section—

  • “expenditure” means expenditure that is—

    1. (a)

      capitalised for accounting purposes, or

    2. (b)

      recognised in determining the profit or loss of the company concerned without being capitalised for accounting purposes,

    subject to any adjustments under this Part or Part 4 of TIOPA 2010;

  • “qualifying IP asset” has the same meaning as in section 879I (see section 879J).

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)