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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets excluded from CTA09/PART8 as special tax rules apply: except as regards royalties: overview

CTA09/PART8/S810-813 and S902

As explained in CIRD10110 the principal effects of CTA09/PART8 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 CTA09/PART8 on royalties, therefore, is at most a matter of timing (see CIRD11700). The limited effect of CTA09/PART8 therefore makes it possible to bring into CTA09/PART8 royalties in respect of assets otherwise outside CTA09/PART8. The assets may be outside CTA09/PART8 because they fail the time test (see CIRD11700) or because they are excluded by S810-813 or S902.

The exclusions in these sections are as follows:

  • S902: assets held for the purpose of a life assurance business (CIRD25115);
  • S810: assets held for the purpose of a mutual trade or business other than life assurance (CIRD25120);
  • S811 and S812: certain master versions of films or sound recordings (CIRD25130); and
  • S813: computer software treated as part of the cost of the associated hardware (CIRD25140).