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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets excluded from Schedule 29: assets held for non-qualifying purposes


Non-qualifying purposes

This paragraph excludes intangible fixed assets to the extent they are held by a company for purposes that are:

  • other than its business or other commercial purposes (see below), or
  • those of activities in respect of which it is outside the charge to CT (see CIRD25090).


Depending on the precise facts intangible assets held by a club or a society forrecreational or similar purposes may well be excluded from Schedule 29 under one or both of these rules.

Business or commercial purpose

Schedule 29 does not attract as a matter of course the general computational rules which apply for CT, such as that prohibiting tax deductions for expenditure not incurred wholly and exclusively for the purposes of a trade ICTA88/S74 (1)(a)). Paragraph 77(a) fills the gap to the extent necessary.

Paragraph 77(a) contains nothing equivalent to the requirement in Section 74(1)(a) that a purpose should be an exclusive one. The test would normally be satisfied where for example it is the commercially inspired practice of a group of companies to centralise the holding of its intangible assets in one group member, which then grants rights to use those assets to fellow members, whether located in the UK or elsewhere.

See CIRD48120 for the role of this provision in countering tax avoidance.