Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Corporate Intangibles Research and Development Manual

From
HM Revenue & Customs
Updated
, see all updates

Intangible assets: international issues: company ceases to be resident in UK or asset ceases to be used in UK trade carried on through a permanent establishment in the UK

CTA09/S859

Circumstances where provision applies

The first is where:

  • a company ceases to be resident in the UK (on or after 1 April 2002),
  • it holds goodwill or an intangible asset which was a ‘chargeable intangible asset’ immediately beforehand,
  • that asset ceases to be a ‘chargeable intangible asset’ as a result.

The second is where:

  • a company which is not resident in the UK holds goodwill or an intangible asset for the purposes of a trade it carries on through a permanent establishment in the UK,
  • that asset is a ‘chargeable intangible asset’ in its hands at any time,
  • immediately after that time the asset ceases to be a chargeable intangible asset (other than by being realised) - normally because it stops being used for the purposes of the UK trade carried on through a permanent establishment in the UK.

An asset is a ‘chargeable intangible asset’ at any time if a gain on its disposal gives rise to a taxable credit under the rules described in CIRD13210 onwards, see CIRD20035.

Treatment

For the purposes of CTA09/PART8 the company is regarded as:

  • realising the asset and reacquiring it immediately before the asset leaves the UK tax,
  • doing so for at its market value (see CIRD45030) at the time.

In some circumstances it is possible for a company that becomes non-resident to defer the resulting taxable credit, see CIRD47040.

There is no equivalent deferral where the credit arises in the second of the circumstances described above (where the asset ceases to be used for the purposes of a trade carried on by a non-resident company through a UK permanent establishment).

Where valuation of intangible assets is an issue see CIRD10240.