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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets: avoidance: specific rules

Rules in CTA09/PART8 inhibiting avoidance in specific situations

The following specific rules in CTA09/PART8 will counter some attempts at exploiting the legislation:

  • where an asset is transferred from a company to a ‘related party’ (or in the other direction) and the asset is within CTA09/PART 8 in the hands of the company the transfer is regarded as taking place at market value (CIRD45030),
  • where a company ceases to be resident in the UK, or where a non-resident ceases to use such an asset for its UK trade carried on through a permanent establishment in the UK, the asset is deemed to be disposed of at market value (CIRD47030),
  • the degrouping adjustment where (broadly) a company to which goodwill or an intangible asset has been transferred on a tax neutral basis, leaves a group (CIRD40500 onwards),
  • tax neutral treatment under CTA09/PART 8 on a business reorganisation is subject to a test of commercial purpose (CIRD42000 onwards),
  • attempts to convert existing fungible assets into assets within CTA09/PART 8 by sale and repurchase (CIRD11770),
  • attempts to convert existing assets into assets within CTA09/PART 8 by sale and finance lease back (CIRD27060).
  • attempts to create new assets from the value of companies existing assets (CIRD48280).
  • attempts to bring goodwill within the regime by misinterpreting rules which determine the timing of creation of goodwill (CIRD48290).