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HMRC internal manual

Corporate Intangibles Research and Development Manual

Reinvestment relief: general matters and conditions to be satisfied: on realisation: part realisation of asset to related party


1) Asset realised is a chargeable intangible asset within CTA09/PART8

Taxable credits on the realisation of chargeable intangible assets are outside the scope of reinvestment relief if they arise on a part realisation (CIRD13260) where the interest in the asset realised is acquired by a ‘related party’ (CIRD45105 onwards).

In general, the intention behind the legislation is that receipts that are currently of a revenue nature should not count as realisation proceeds and should not, therefore, be capable of deferral by means of a reinvestment relief claim. Instead, they should come within CIRD13020.

Accountancy rules may not always provide an adequate framework for defining the boundary between the realisation and the ordinary exploitation of an asset in a way that is consistent with this intention. CTA09/S850 therefore prevents reinvestment relief from being available on a part realisation where the person acquiring the asset is a relatedparty.

2) CG disposals of goodwill and intangible assets

There is no similar restriction to eligibility for reinvestment relief where there is apart disposal of an existing asset to a connected person giving rise to a capital gain (see CIRD20050).