Specialist Tax Adviser Aiglon Consulting
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Budget 2020: Further reform of intangible fixed assets


The government has continued its reform of the intangible fixed assets (IFA) regime, which applies to companies that hold assets such a goodwill and intellectual property. 

12th Mar 2020
Specialist Tax Adviser Aiglon Consulting
In association with
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When the Intangible Fixed Asset (IFA) regime was introduced in 2002 (CTA 2009, part 8), there was a grandfathering provision that kept all pre-2002 intangible fixed assets out of the regime until such time as they were acquired from an unrelated party. In practice, this means that there are still a lot of pre-2002 assets that have not yet come within the IFA regime.

2019 changes

In February 2018, the government launched a consultation on possible changes to the IFA regime. Although a number of possible changes were mentioned in the consultation, only two of those made it into Finance Act 2019, as I reported at the time of the last Budget in 2018. Bringing pre-2002 assets into the IFA regime was not one of them.

2020 changes

Budget 2020 included an announcement that the government intends to introduce legislation in Finance Bill 2020 on the tax treatment of intangible fixed assets.

This announcement means that pre-2002 assets acquired from connected parties on or after 1 July 2020 will now come within the IFA regime. One of the reasons given for not making this change in Finance Act 2019 was that many companies opposed it because they had such assets with accrued capital losses.

Transitional rules

The Finance Bill 2020 will include transitional rules to cover pre-2002 assets which are already within the charge to corporation tax prior to 1 July 2020. This will include situations where companies have assets with accrued gains or losses under the capital gains rules. There will also, of course, have to be some anti-avoidance rules; these are likely to limit amounts of relief by reference to market value.

Problem solved

Following the consultation in 2018 it seemed that dealing with these pre-2002 assets had been considered too difficult. This proposal is very welcome, in that it should now be possible to bring a lot more of these assets into the IFA regime sooner than might otherwise have happened.


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