Commentary on Sections Overview Overview Section 890: Fungible assets: application of section 858
2258.This section provides for separate pools of fungible assets in order that expenditure on them after 1 April 2002 can come within this Part. It is based on paragraph 126 of Schedule 29 to FA 2002.
2259.This and the next section complement section 858 which treats fungible assets held by the same person in the same capacity as indistinguishable parts of a single asset. An example of a fungible asset is a milk quota which grows or diminishes as additional assets of the same kind are acquired or realised. So successive acquisitions are treated as increasing the size of the single asset, whereas a disposal of some, but not all, of the units comprising the single asset is treated as a part realisation.
2260.The general principle of the intangible fixed assets rules is that only expenditure on or after 1 April 2002 should come within the regime. But without further rules this would not be achieved for fungible assets. If fungible assets of a particular kind are held by a company before 1 April 2002 any additional assets of that kind acquired subsequently would fail the time test in section 882 because the acquisitions would be regarded as merely enlarging an existing single asset.
2261.The separate pool approach of this section enables the time test in section 882 to be satisfied by fungible assets acquired on or after 1 April 2002 which are additions to assets of the same kind.