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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets within CTA09/PART8: asset conditions: requirement that asset must be fixed


As outlined in CIRD11100 there is a general condition that only intangible assets that are fixed can come within CTA09/PART 8. CTA09/S713 defines such an intangible fixed asset held by a company as one that is ‘acquired’ or ‘created’ by it for use on a continuing basis in the course of its activities (whether a particular intangible fixed asset comes within the regime will depend on the application of other provisions defining the scope of the regime, including chapters 10 and 16 of Part 8).

This definition is similar in all essential respects to the notion of a fixed asset as a matter of accountancy. It should be noted however that intangible assets within the scope of FRS102 s18, IAS38 and FRS105 s13 do not necessarily have to be fixed assets although this is not true for assets within the scope of FRS10. The definition makes the point clear on the face of the legislation: only intellectual property and other intangible assets that are fixed come within CTA09/PART 8.

An asset which is acquired or created for use in this way remains a fixed asset even though the purpose for which it is held changes, for example because the company decides to sell an asset or ceases to use it at all.

Assets which do not appear as fixed assets on balance sheet

CTA09/PART8/S713 (3) puts beyond doubt that an asset does not have to appear on a company’s balance sheet to make it a fixed asset. Most internally generated fixed assets cannot be capitalised in this way. Similarly, a licence acquired to exploit an intangible asset on a continuing basis will be a fixed asset even though it is not capitalised in the accounts (where no lump sum is paid for the licence and the consideration given wholly takes the form of royalties).

On the other hand, assets acquired as dealing or trading stock do not satisfy the definition. Nor does pre-paid expenditure.

More generally, while it can be assumed that intangible assets which are capital for tax purposes (applying the tests developed by case-law) will count as fixed assets under the definition described above, an asset which is held on revenue account under those tests may well be a fixed asset under the definition.


There is an exception to the requirement that intangible assets need to be ‘fixed’ in relation to options to acquire or dispose of intangible fixed assets (see CIRD11175).