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HMRC internal manual

Corporate Intangibles Research and Development Manual

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HM Revenue & Customs
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Telecommunications licences and rights: transition to intangible regime: reinvestment relief (CT only)

The rules in FA00/SCH23 cease to apply for the purposes of CT for accounting periods ending on or after 1 April 2002 and are superseded by the rules in FA02/SCH29. However, FA00/SCH23 continues to apply for the purposes of income tax.

A right to which the rules in FA00/SCH23 applied and which is a chargeable intangible asset immediately after the beginning of the first accounting period ending on or after 1 April 2002 is treated for the purposes of reinvestment relief under part 7 of FA02/SCH29 as if had been a chargeable intangible asset from its acquisition to the beginning of that accounting period.

This means that it will not fail to meet the conditions in FA02/SCH29/PARA38 (1)(a) simply because it was not a chargeable intangible asset for the period before FA02/SCH29 could apply to it. See CIRD20040.

To find out more about reinvestment relief see CIRD20000 onwards.

Example

Imola Ltd acquires an IRU on 1 April 2001 and disposes of it on 31 March 2003. Its accounting date is 31 March. Assume that the IRU is an intangible fixed asset under FA02/SCH29/PARA3 and is a chargeable intangible asset throughout the period from 1 April 2002 to 31 March 2003. It is treated as a chargeable intangible asset throughout the period from 1 April 2001 to 31 March 2003 (the period during which the company held it) and so the condition in FA02/SCH29/PARA38 (1)(a) is met.