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HMRC internal manual

Corporate Intangibles Research and Development Manual

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Core computational rules: realisation of assets: asset deemed to be realised while remaining in hands of company

CTA09/PART8/S859

This paragraph identifies three circumstances where an asset ceases to be a ‘chargeable intangible asset’ (see CIRD20035) in the hands of a company while remaining in its possession. These are:

  • a company holding a chargeable intangible asset ceases to be resident in the UK - CIRD47030 
  • a chargeable intangible asset held by a non-resident company ceases to be used in its UK trade carried on through a permanent establishment in the UK - CIRD47030
  • a chargeable intangible asset held for the purpose of a non-mutual trade or business begins to be used for a mutual trade (see below)

Treatment of asset beginning to be used for mutual trade

For the purposes of Part 8 the company is regarded as:

  • realising the asset and reacquiring it immediately before it begins to be used for the mutual trade,
  • doing so for its market value (CIRD45030) at the time.

See CIRD12745 for the treatment under Part 8 where an asset ceases to be used for a mutual trade.