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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets within CTA09/PART8: FA02 rule exceptions: fungible assets: additions to existing holdings outside CTA09/PART8

CTA09/PART8/S890 (2) - (3) and S891 (2)

S890 (2) and (3) provide that a company’s fungible assets of a particular kind which fail the general conditions of the FA02 rule (normally because they were held by the company prior to 1 April 2002) and any other intangible fixed assets of the same kind are to be regarded as two different fungible assets.

The general conditions are therefore applied to the latter separately. Thus fungible assets of one kind purchased from an unrelated party on or after 1 April 2002 would be subject to CTA09/PART8 as if they were a different fungible asset from the fungible asset of the same kind already held and which failed the general conditions.

This provision is subject to the anti-avoidance rule described in CIRD11780.

S891 (2) provides an identification rule to deal with the situation where under the provisions described above a company regarded as holding two fungible assets of the same kind sells some of the assets of that kind. The rule is that the assets sold are regarded as far as possible as reducing the fungible asset that is outside CTA09/PART8.