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HMRC internal manual

Corporate Intangibles Research and Development Manual

HM Revenue & Customs
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Intangible assets excluded from Schedule 29 as special tax rules apply: except as regards royalties: overview

FA02/SCH29/PARA78 - 81

As explained in CIRD10110 the principal effects of Schedule 29 are:

  • to do away with the exclusion of capital matters relating to goodwill and intangible assets from computations of income,
  • to take into account for tax purposes sums recognised in a company’s accounts as they are taken to the profit and loss account.


Both incoming and outgoing royalties of a company, however, are already revenue items. The impact of Schedule 29 on royalties, therefore, is at most a matter of timing (see CIRD11700). The limited effect of Schedule 29 therefore makes it possible to bring into Schedule 29 royalties in respect of assets otherwise outside Schedule 29. The assets may be outside Schedule 29 because they fail the time test (see CIRD11700) or because they are excluded by paragraphs 78 and 81.

The exclusions in these paragraphs are as follows:

  • assets held for the purpose of a life assurance business (CIRD25115),
  • assets held for the purpose of a mutual trade or business other than life assurance (CIRD25120),
  • certain master versions of films or sound recordings (CIRD25130),
  • computer software treated as part of the cost of the associated hardware (CIRD25140).