The announcement that the corporation tax treatment of intangible fixed assets would be reformed was a headline grabbing tax measure in Budget 2020. The government proclaimed that the reforms would remove restrictions preventing companies from claiming tax relief for older, well-established intellectual property rights and would create a single regime for intangibles acquired by companies from 1 July 2020. The reality emerging from the Finance Bill 2020 legislation is that the benefits of the reforms are more obscure. While the new rules may provide some opportunity to access additional relief, in particular where intangibles are acquired from non-UK companies, this is at the cost of considerable additional complexity, and in the majority of cases benefits are likely to be significantly restricted.
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The announcement that the corporation tax treatment of intangible fixed assets would be reformed was a headline grabbing tax measure in Budget 2020. The government proclaimed that the reforms would remove restrictions preventing companies from claiming tax relief for older, well-established intellectual property rights and would create a single regime for intangibles acquired by companies from 1 July 2020. The reality emerging from the Finance Bill 2020 legislation is that the benefits of the reforms are more obscure. While the new rules may provide some opportunity to access additional relief, in particular where intangibles are acquired from non-UK companies, this is at the cost of considerable additional complexity, and in the majority of cases benefits are likely to be significantly restricted.
If you are not a subscriber, subscribe now to read this content.
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