Revenue’s intangible reform

Comments were invited on the draft clauses and the partial regulatory impact assessment before the end of January.

The government published proposals for a comprehensive new regime for intangible assets at the time of the Budget last year. These proposals were developed after consultation with business and were designed to:

  • provide relief for the cost of acquiring intangible assets where none had previously been available;
  • give relief on a consistent basis, following the rate of amortisation used in companies’ accounts;
  • treat sales of intangibles consistently, with profits taxed as income but subject to a new roll-over relief for reinvestment in new intangibles; and
  • provide transitional arrangements that preserve expectations for companies’ existing intangible assets.

    The new approach has been welcomed by business and subject to consultation, the government will introduce it from 1 April.

    The intangibles reform will mark a further step in the government’s programme of corporate tax reform, set out in a consultation document on large business taxation. The government sees the key principles for reform as:

  • business competitiveness – to create the best possible location for investment by removing tax distortions and promoting productivity; and
  • fairness – ensuring that individual businesses pay their fair share of tax in relation to their commercial profits and compete on a level playing field.In addition to the intangibles reform, the government is:
  • introducing an exemption for capital gains and losses on disposals of companies’ substantial shareholdings;
  • introducing a modernised regime for the taxation of corporate debt, financial instruments and foreign exchange gains and losses;
  • consulting further on the design of an R&D tax credit for larger companies; and
  • consulting on proposals to reduce the compliance burden associated with the requirement to deduct tax at source on cross-border royalty payments.

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