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Tax treatment of intangibles

The basic rule is that the tax treatment of qualifying intangible fixed assets acquired or created on or after 1 April 2002 broadly follows the accounting treatment under generally accepted accounting practice (GAAP) (see below). This includes amortisation, royalties paid and received, revaluations, and reversals of previous gains and losses. Therefore, for trading intangible assets, the debits and credits in the financial statements will not need to be adjusted in the corporation tax computation. However, major restrictions apply for debits relating to goodwill and customer-related intangible assets depending on the date they were acquired or created, see the Goodwill and other customer-related intangible assets guidance note.

Where an asset was acquired or created before 1 April 2002, it is referred to as a ‘pre-FA 2002 asset’. Prior to 1 July 2020, pre-FA 2002 assets did not come within the scope of the corporate intangibles regime and instead were (in most cases) dealt with under the capital gains regime. However, for acquisitions made on or after 1 July 2020, any intangible asset acquired by