Amortisation of intangible fixed assets


Published by a UUÂãÁÄÖ±²¥ Tax expert
Practice notes

Amortisation of intangible fixed assets


Published by a UUÂãÁÄÖ±²¥ Tax expert

Practice notes
imgtext

Where a company acquires (or otherwise incurs capitalised expenditure upon) an intangible fixed asset that falls within the corporate intangible fixed asset regime (IFA regime):

  1. •

    no capital allowances are available in respect of that intangible fixed asset (since the IFA regime is an exclusive regime), but

  2. •

    the company will be able to claim a tax deduction for amortisation of the intangible fixed asset

The amount of the tax deduction will generally be the accounts amortisation but where there is no amortisation in the accounts, where certain reliefs are available or where the company elects for a fixed rate deduction the amount recognised for tax purposes may vary from the accounts.

Accounting treatment of the acquisition of third party generated intangible fixed assets

UK generally accepted accounting practice (UK GAAP)

Where expenditure is incurred by a company on acquiring an intangible fixed asset within the IFA regime that has an enduring benefit for the business, the expenditure will be capitalised in the company’s balance sheet.

Where accounting standards allow, the capitalised expenditure will be written down to the

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Key definition:
Amortisation definition
What does Amortisation mean?

The reduction of the principal amount over time (often contrasted to a bullet repayment).

Read more

Popular documents

When would preference shares fall under the shares as debt rules and hence the dividend payments would

When would preference shares fall under the shares as debt rules and hence the dividend payments would fall to be taxed as debt as opposed to qualifying for the corporation tax exemption for dividend payments?The ‘shares as debt’ rules applied to shares held by companies up until 21 April 2009 (for

Qualifying charitable donations and excess management expenses

Qualifying charitable donations and excess management expensesAll companies within the charge to corporation tax can deduct qualifying charitable donations from their total profits, after all other deductions have been made (other than group relief and group relief for carried-forward losses) to

Distribution key concepts—repayment of capital

Distribution key concepts—repayment of capitalAlongside the concept of new consideration, which is further explained in Distribution key concepts—new consideration, the concept of repayment of capital is vital in determining whether certain transactions are distributions.At the broadest level the

Capital allowances—interaction with CGT, VAT and stamp taxes

Capital allowances—interaction with CGT, VAT and stamp taxesThis Practice Note sets out how the capital allowances rules interact with the rules relating to:•capital gains tax, including corporation tax on chargeable gains (CGT)•value added tax (VAT), and•stamp taxes, namely:◦stamp duty land tax