Expenditure can only be taken into account for reinvestment relief if it is capitalised for accounting purposes (rather than written off as incurred under FA02/SCH29/PARA8 - see CIRD12530).
Where an intangible asset is realised shortly after acquisition
the fact that it has never appeared in a company’s balance
sheet drawn up at the end of a period of account would not prevent
the expenditure from being regarded as capitalised.
Relief by reference to expenditure on an asset in these
circumstances is likely to be available only where a company
changes its plans shortly after acquiring an asset. That is because
an intangible asset does not come within Schedule 29 unless it is a
fixed asset, that is one intended on acquisition or creation for
use on a continuing basis in the company’s business (see
CIRD11170).
