Taxable credits on the realisation of chargeable intangible assets are outside the scope of reinvestment relief if they arise on a part realisation ( CIRD13260), where the interest in the asset realised is acquired by a ‘related party’ ( CIRD45105 onwards).
In general, the intention behind the legislation is that
receipts which are currently of a revenue nature should not count
as realisation proceeds and should not therefore be capable of
deferral by means of a reinvestment relief claim. Instead they
should come within
CIRD13020.
Accountancy rules may not always provide an adequate
framework for defining the boundary between the realisation and the
ordinary exploitation of an asset in a way that is consistent with
this intention. Paragraph 93 therefore prevents reinvestment relief
from being available on a part realisation where the person
acquiring the asset is a related party.
There is no similar restriction to eligibility for reinvestment relief where there is a part disposal of an existing asset to a connected person, giving rise to a capital gain (see CIRD20050).
