Introduction Details of the Section
4.Subsection (2) provides for an amendment to section 712(2) of the Corporation Tax Act 2009 (CTA) to confirm that the meaning of an ‘intangible asset’ also includes an internally-generated asset.
5.Subsection (3) provides for a new subsection to be inserted in section 715 of CTA. New section 715(4) confirms that for the purposes of the regime all goodwill is created in the course of carrying on a business. This confirms, for example, that no goodwill is created by the acquisition of a business or by the accounting recognition/capitalisation of goodwill.
6.Subsection (4) provides for consequential amendments to section 883 of CTA so that the interface with and references to other sections being amended operate correctly.
7.Subsection (5) provides for amendments to section 884 of CTA to confirm that goodwill is treated as created before 1 April 2002 if the business was carried on at any time before that date by the company or a related party, and otherwise is treated as created on or after 1 April 2002.
8.Subsection (6) provides for amendments to section 885 of CTA to confirm that an asset is treated as created before 1 April 2002 if the asset was held at any time before that date by the company or a related party and it represents expenditure that under the law as it stood before 1 April 2002 is not qualifying expenditure for the purposes of any allowance under the Capital Allowances Act 2001. In all other cases, the asset is treated as created on or after 1 April 2002.
9.Subsection (7) provides for the amendments made by the section to have effect in relation to accounting periods beginning on or after 22 April 2009, and that in relation to those accounting periods the amendments are treated as always having had effect. The amendments apply for the purposes of calculating the future tax consequences of past transactions.
10.Subsection (8) provides that where an accounting period starts before 22 April 2009 and ends on or after that date, then for the purpose of applying the amendments, the period from 22 April 2009 to the end of the current accounting period will be treated as a separate notional accounting period.