CIRD11610 - Intangible assets within CTA09/PART8: FA02 rule: general conditions: asset acquired on or after 1 April 2002 from unrelated party

CTA09/PART8/S882 (1)(b)

General rule

An intangible fixed asset held by a company satisfies the general conditions (CIRD11520) if both of the following apply:

• it was ‘acquired’ by the company on or after 1 April 2002
• the transferor was not a person who was a ‘related party’ at the time of the ‘acquisition’

The term ‘acquired on or after 1 April 2002’ has a specific meaning for the purposes of applying the FA02 rule - it is not sufficient for the asset to be acquired in the ordinary legal sense of the word. An asset is only acquired on or after 1 April 2002 for the purposes of Part 8 if and when expenditure is incurred on the acquisition of the asset on or after 1 April 2002.

An asset is not prevented from satisfying this test by the fact that it was created prior to 1 April 2002.

Exceptions

An intangible fixed asset which satisfies this test remains excluded from Part 8 if any of the following apply:

• the transaction falls within CIRD11660 (certain transfers where for CG purposes the transferor is treated as disposing of the asset on no gain/no loss terms)
• it is a fungible asset which is regarded as an ‘pre-FA 2002 asset’ (CIRD11510) under the special rules for fungible assets (CIRD11760 to CIRD11780)

Points to note

• See CIRD11670 and CIRD11690 for the time when an asset is regarded as acquired for the purpose of this rule.
• See CIRD45105 onwards for the meaning of ‘related party’. Where for example a company acquires an asset by issuing its own shares to a previously unrelated transferor by way of consideration, the transferor may as a result control, or otherwise become related to, the company. In those circumstances the transferor should be regarded as a related party of the company at the time of the acquisition of the asset.