Corporation tax - Chapter 16 - IFAs

Question 1

What is the treatment of Goodwill and other customer related intangibles acquired before 1 April 2002?

Answer 1

Dealt with under normal capital gains rules

Question 2

What is the treatment of Goodwill and other customer related intangibles acquired between 1 April 2002 - 7 July 2015?

Answer 2

Can take a deduction for:

1. Amortisation / Impairment as per the accounts;
2. Elect for 4% WDA on cost.

Question 3

What is the treatment of Goodwill and other customer related intangibles acquired between 8 July 2015 - 31 March 2019 (From 3 December 2014 if from a related party)?

Answer 3

No tax deduction available

Question 4

What is the treatment of Goodwill and other customer related intangibles acquired from 1 April 2019?

Answer 4

If acquired as part of a business with qualifying IP then must take 6.5% WDA on cost paid to third party (Cost is capped at 6 x Cost of Relevant asset).

If not acquired as part of a business with qualifying IP then no tax deduction is available

Question 5

What is qualifying IP?

Answer 5

1. Patents
2. Registered designs
3. Copyright or design rights

Question 6

What are the key categories of pre-2002 assets?

Answer 6

1. Assets created or acquired by a company before 1 April 2002;
2. Pre-April 2002 assets acquired on or after April 2002 from a related person;
3. Pre-April 2002 assets acquired on or after April 2002 from another group member.

Question 7

What are the key categories of assets in the IFA regime?

Answer 7

1. Assets created by a company on or after 1 April 2002;
2. Assets acquired by a company from an unrelated person between 1 April 2002 and 30 June 2020;
3. Assets acquired by a company from an related person between 1 April 2002 and 30 June 2020 where:
   - The related person created the asset on or after 1 April 2002; or
   - The related person acquired the asset from an unrelated person on or after 1 April 2002.
4. Assets acquired by a company on or after 1 July 2020 from an unrelated person or a related person (but not in the same group as the company acquiring the asset) regardless of when the asset was created or acquired from that person;
5. Assets created or acquired at any time and held immediately before 1 July 2020 by a company not within the charge to CT.