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HMRC internal manual

Corporate Intangibles Research and Development Manual

HM Revenue & Customs
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Reinvestment relief: general matters and conditions to be satisfied: by new asset: deemed acquisition: reacquisition of the same asset

FA02/SCH29/PARA44 and PARA45 (2)

Deemed acquisition

In some circumstances Schedule 29 deems an asset to be realised and reacquired, for example at market value in the context of a ‘degrouping’ (CIRD20460) or at its accounting value when the company becomes resident in the UK (CIRD47020). Expenditure deemed to have been incurred in these circumstances could never be taken into account for reinvestment relief.

Occasions where there is a deemed reacquisition of an asset need to be distinguished from those where there is a real acquisition but under Schedule 29 the acquisition is regarded as taking place for an amount which is different from the actual amount paid.

Actual reacquisition of same asset

Paragraph 45 enables relief to be given where a company realises an asset but subsequently reacquires it, for example as a result of a change of business plans. ESC/D16(see CG60971) has a similar effect for CG roll-over relief.

In contrast to the extra-statutory concession there is no specific requirement in paragraph 45 that the asset should be reacquired for purely commercial reasons. But if it appears that an attempt has been made to take advantage of this provision for tax avoidance purposes, the possible application of FA02/SCH29/PARA111 should be considered (see CIRD48105 onwards).