CIRD10175 - Intangible assets: introduction: reinvestment relief: transitional arrangements
With the introduction of the new intangible assets regime, there
is a switch from CG roll-over relief to intangible assets
reinvestment relief, as the applicable relief for gains on the
realisation of intangible assets.
There are various rules to cover the transition, which are
summarised in the flow chart at
CIRD20280, and the table at
CIRD20285. There is also further
guidance at
CIRD20270. In essence the rules are as
set out below.
At 1 April 2002, there is a break between the old CG tax roll
over relief system and the new intangible asset reinvestment
relief. Before deciding on the tax treatment it is necessary to
decide into which category an asset falls. In the outline below,
the concept of a
chargeable intangible asset is used. The
expression refers to intangible assets a gain on the realisation of
which would fall within the new rules (see
CIRD20035).
Outline
- Gains on tangible assets can never be rolled over into acquisitions of chargeable intangible assets.
- Gains on intangible assets arising before 1 April 2002 cannot be rolled over against the acquisition of chargeable intangible assets. Instead they can be rolled over against CG code assets (including intangible assets which are not chargeable intangible assets).
- Gains on intangible assets realised after 31 March 2002 can be:
- rolled over under the reinvestment relief rules into chargeable intangible assets acquired after 31 March 2002, or
- rolled over into CG code assets acquired prior to 1 April 2002 so long as the acquisition falls within the twelve months prior to the disposal (only disposals up to 31 March 2003 can therefore be rolled-over in this way, and the assets have to be eligible for CG roll-over relief), or
- apportioned so that part is rolled over against assets within (a) and part against assets within (b).
