CIRD11675 - Intangible assets within CTA09/PART8: FA02 rule: general conditions: time when asset created or acquired: special rules for goodwill and similar assets

CTA09/PART8/S884, 885 & 889

Special rule for goodwill and similar assets

In the case of the creation of assets, the approach described in CIRD11670 (asset created or acquired when expenditure is incurred) is subject to important exceptions for:

• goodwill created by the company which holds it or by a related party (rather than acquired from an unrelated party) - CIRD11680 
• other internally generated assets built up out of expenditure which would not qualify for capital allowances if the expenditure were outside Part 8 - CIRD11685 

(The exceptions reflect the practical difficulties that would otherwise arise in having to determine to what extent the realisation proceeds of such an asset, partly created before and partly after 1 April 2002, fall within Part 8).

Other internally generated assets

Expenditure on the creation of other internally generated intangible fixed assets is treated as incurred when an unconditional obligation to pay it arises. This is the same basic rule as for capital allowances - see CAA01/S5 and CA11800.

Whether expenditure is incurred on the creation of an intangible asset or on the enhancement of an asset already in existence is discussed in CIRD11678.