CIRD11740 - Intangible assets within FA02/SCH29: time test exceptions: assets already within income regime: certain telecommunications assets

FA02/SCH29/PARA128

Introduction

FA00/SCH23 introduced a tax regime for certain telecommunications assets as defined in that legislation, that is in outline some wireless telegraphy licences and IRUs. See CIRD70110.

A licence or right within Schedule 23 falls within the definition of an intangible fixed asset for the purposes of Schedule 29 (see CIRD11100 onwards). Furthermore, the computational rules in Schedule 23 (bringing the assets into an accounts-based income regime) are essentially similar to those in Schedule 29.

Treatment

Paragraph 128 of Schedule 29 therefore provides that Schedule 29 applies:

• to assets within Schedule 23 even though they fail the general conditions relating to the time test (normally because they were held by the company prior to 1 April 2002);
• for accounting periods ending on or after 1 April 2002 (including that part of the first accounting period to which Schedule 29 applies which is before 1 April 2002) and subsequent periods.

Amounts brought to account for tax under Schedule 23 for earlier periods, for example in respect of the amortisation of Schedule 23 assets, are treated as having been brought into account under Schedule 29. See also CIRD70705.

Assets excluded

Schedule 23, and therefore Schedule 29, does not apply to:

• IRUs acquired by the company in question before 21 March 2000;
• IRUs acquired afterwards but acquired (directly or indirectly) from an associated company that acquired the asset before that date.

See CIRD70600.