CIRD11770 - Intangible assets within FA02/SCH29: time test exceptions: fungible assets: additions to existing holdings outside Schedule 29

FA02/SCH29/PARA126 (2) - (4)

Paragraph 126 (2) and (3) provide that a company’s fungible assets of a particular kind which fail the time test (normally because they were held by the company prior to 1 April 2002) and any other intangible fixed assets of the same kind are to be regarded as two different fungible assets.

The time test is therefore applied to the latter separately. Thus fungible assets of one kind purchased from an unrelated party on or after 1 April 2002 would be subject to Schedule 29 as if they were a different fungible asset from the fungible asset of the same kind already held and which failed the time test.

This provision is subject to the anti-avoidance rule described in CIRD11780.

Paragraph 126 (4) provides an identification rule to deal with the situation where under the provisions described above a company regarded as holding two fungible assets of the same kind sells some of the assets of that kind. The rule is that the assets sold are regarded as far as possible as reducing the fungible asset that is outside Schedule 29.