Clause 675: Transfer of derivative contract at notional carrying value     78

Clause 676: Transferor using fair value accounting     78

Clause 677: Tax avoidance etc     78

Clause 678: Procedure on application for clearance     78

Clause 679: Decision on application for clearance     78

Clause 680: Disapplication of Chapter where transparent entities involved     79

Clause 681: Interpretation     79

Chapter 10: European cross-border mergers     79

Clause 682: Introduction to Chapter     79

Clause 683: Meaning of “the transferee” and “transferor”     79

Clause 684: Transfer of derivative contract at notional carrying value     79

Clause 685: Transferor using fair value accounting     80

Clause 686: Tax avoidance etc     80

Clause 687: Disapplication of Chapter where transparent entities involved     80

Clause 688: Interpretation     80

Chapter 11: Tax avoidance     80

Clause 689: Overview of Chapter     80

Clause 690: Derivative contracts for unallowable purposes     80

Clause 691: Meaning of “unallowable purpose”     81

Clause 692: Allowance of accumulated net losses     81

Clause 693: Bringing into account adjustments under Schedule 28AA to ICTA     81

Clause 694: Exchange gains and losses     82

Clause 695: Transfers of value to connected companies     82

Clause 696: Derivative contracts with non-UK residents     83

Clause 697: Exceptions to section 696     83

Clause 698: Disposals for consideration not fully recognised by accounting practice     83

Chapter 12: Priority rules     84

Clause 699: Priority of this Part for corporation tax purposes     84

Clause 700: Relationship of this Part to Part 5: loan relationships     84

Chapter 13: General and supplementary provisions     84

Clause 701: Power to amend some provisions     84

Clause 702: “Carrying value”     85

Clause 703: “Chargeable asset”     85

Clause 704: “Creditor relationship” and “debtor relationship”     86

Clause 705: Expressions relating to exchange gains and losses     86

Clause 706: “Excluded body”     86

Clause 707: “Hedging relationship”     87

Clause 708: “Plain vanilla contract”     87

Clause 709: “Securities house”     87

Clause 710: Other definitions     87

Part 8: Intangible fixed assets     88

Chapter 1: Introduction     88

Clause 711: Overview of Part     88

Clause 712: “Intangible asset”     88

Clause 713: “Intangible fixed asset”     88

Clause 714: “Royalty”     88

Clause 715: Application of this Part to goodwill     89

Clause 716: “Recognised” amounts and “GAAP-compliant accounts”     89

Clause 717: Companies without GAAP-compliant accounts     89

Clause 718: GAAP-compliant accounts: reference to consolidated group accounts     89

Clause 719: Accounting value     89

Chapter 2: Credits in respect of intangible fixed assets     89

Clause 720: Introduction     89

Clause 721: Receipts recognised as they accrue     90

Clause 722: Receipts in respect of royalties so far as not dealt with under section 721     90

Clause 723: Revaluation     90

Clause 724: Negative goodwill     90

Clause 725: Reversal of previous accounting loss     90

Chapter 3: Debits in respect of intangible fixed assets     90

Clause 726: Introduction     90

Clause 727: References to expenditure on an asset     90

Clause 728: Expenditure written off as it is incurred     91

Clause 729: Writing down on accounting basis     91

Clause 730: Writing down at fixed rate: election for fixed-rate basis     91

Clause 731: Writing down at fixed rate: calculation     91

Clause 732: Reversal of previous accounting gain     91

Chapter 4: Realisation of intangible fixed assets     91

Clause 733: Overview of Chapter     91

Clause 734: Meaning of “realisation”     92

Clause 735: Asset written down for tax purposes     92

Clause 736: Asset shown in balance sheet and not written down for tax purposes     92

Clause 737: Apportionment in case of part realisation     92

Clause 738: Asset not shown in balance sheet     92

Clause 739: Meaning of “proceeds of realisation”     93

Clause 740: Abortive expenditure on realisation     93

Clause 741: Meaning of “chargeable intangible asset” and “chargeable realisation gain”     93

Chapter 5: Calculation of tax written-down value     93

Clause 742: Asset written down on accounting basis     93

Clause 743: Asset written down at fixed rate     93

Clause 744: Effect of part realisation of asset     93

Chapter 6: How credits and debits are given effect     94

Clause 745: Introduction     94

Clause 746: “Non-trading credits” and “non-trading debits”     94

Clause 747: Assets held for purposes of trade     94

Clause 748: Assets held for purposes of property business     94

Clause 749: Assets held for purposes of mines, transport undertakings, etc     94

Clause 750: Assets held for purposes falling within more than one section     95

Clause 751: Non-trading gains and losses     95

Clause 752: Charge to tax on non-trading gains on intangible fixed assets     95

Clause 753: Treatment of non-trading losses     95

Chapter 7: Roll-over relief in case of realisation and reinvestment     95

Clause 754: The relief: the “old asset” and “other assets”     95

Clause 755: Conditions relating to the old asset and its realisation     95

Clause 756: Conditions relating to expenditure on other assets     96

Clause 757: Claim for relief     96

Clause 758: How the relief is given: general     96

Clause 759: Determination of appropriate proportion of cost and adjusted cost     96

Clause 760: References to cost of asset where asset affected by change of accounting policy     96

Clause 761: Declaration of provisional entitlement to relief     96

Clause 762: Realisation and reacquisition     96

Clause 763: Disregard of deemed realisations and reacquisitions     96

Chapter 8: Groups of companies: introduction     97

Clause 764: Meaning of “company”, “group” and “subsidiary”     97

Clause 765: General rule: a company and its 75% subsidiaries form a group     97

Clause 766: Only effective 51% subsidiaries of principal company to be members of group     97

Clause 767: Principal company cannot be 75% subsidiary of another company     97

Clause 768: Company cannot be member of more than one group     97

Clause 769: Continuity of identity of group     97

Clause 770: Continuity where group includes an SE     97

Clause 771: Meaning of “effective 51% subsidiary”     98

Clause 772: Equity holders and profits or assets available for distribution     98

Clause 773: Supplementary provisions     98

Chapter 9: Application of this Part to groups of companies     98

Clause 774: Overview of Chapter     98

Clause 775: Transfers within a group     98

Clause 776: Meaning of “tax-neutral” transfer     98

Clause 777: Relief on realisation and reinvestment: application to group member     98

Clause 778: Relief on reinvestment: acquisition of group company: introduction     99

Clause 779: Rules that apply to cases within section 778     99

Clause 780: Deemed realisation and reacquisition at market value     99

Clause 781: Character of credits and debits brought into account as a result of section 780     99

Clause 782: Certain transferees of businesses etc not treated as leaving group     99

Clause 783: Associated companies leaving group at the same time     100

Clause 784: Groups with a relevant connection     100

Clause 785: Principal company becoming member of another group     100

Clause 786: Character of credits and debits brought into account as a result of section 785     100

Clause 787: Company ceasing to be member of group because of exempt distribution     100

Clause 788: Provisions supplementing sections 780 to 787     100

Clause 789: Merger carried out for genuine commercial reasons     100

Clause 790: Provisions supplementing section 789     101

Clause 791: Application of roll-over relief in relation to degrouping charge     101

Clause 792: Reallocation of charge within group     101

Clause 793: Further requirements about elections under section 792     101

Clause 794: Application of roll-over relief in relation to reallocated charge     101

Clause 795: Recovery of charge from another group company or controlling director     101

Clause 796: Interpretation of section 795     102

Clause 797: Recovery under section 795: procedure etc     102

Clause 798: Recovery under section 795: time limit     102

Clause 799: Disregard of payments between group members for reliefs     102

Chapter 10: Excluded assets     102

Clause 800: Introduction     102

Clause 801: Right to dispose of or acquire excluded asset also excluded     102

Clause 802: Effect of partial exclusion     102

Clause 803: Non-commercial purposes etc     102

Clause 804: Assets for which capital allowances previously made     103

Clause 805: Rights over tangible assets     103

Clause 806: Financial assets     103

Clause 807: Rights in companies, trusts etc     103

Clause 808: Assets representing production expenditure on films     103

Clause 809: Oil licences     103

Clause 810: Mutual trade or business     103

Clause 811: Sound recordings     104

Clause 812: Master versions of films     104

Clause 813: Computer software treated as part of cost of related hardware     104

Clause 814: Research and development     104

Clause 815: Election to exclude capital expenditure on software     104

Clause 816: Further provision about elections under section 815     104

Chapter 11: Transfer of business or trade     105

Clause 817: Overview of Chapter     105

Clause 818: Company reconstruction involving transfer of business     105

Clause 819: European cross-border transfers of business: introduction     105

Clause 820: Transfer of assets on European cross-border transfer of business     105

Clause 821: European cross-border mergers: introduction     105

Clause 822: Transfer of assets on European cross-border merger     105

Clause 823: Interpretation of sections 821 and 822     106

Clause 824: Transfer of business of building society to company     106

Clause 825: Application of sections 780 and 785 where transfer within section 824 occurs     106

Clause 826: Amalgamation of, or transfer of engagements by, certain societies     106

Clause 827: Claims to postpone charge on transfer     106

Clause 828: Relief on transfer     106

Clause 829: Charge on subsequent realisations     106

Clause 830: Exclusion from section 829 of group transfers     106

Clause 831: The genuine commercial transaction requirement and clearance     106

Clause 832: Procedure on application for clearance     107

Clause 833: Decision on application for clearance     107

Chapter 12: Related parties     107

Clause 834: Overview of Chapter     107

Clause 835: “Related party”     107

Clause 836: “Control”     108

Clause 837: “Major interest”     108

Clause 838: General rule     108

Clause 839: Rights and powers held jointly     108

Clause 840: Partnerships     108

Clause 841: “Participator” and “associate”     108

Clause 842: Introduction     108

Clause 843: Who are connected persons     108

Chapter 13: Transactions between related parties     108

Clause 844: Overview of Chapter     108

Clause 845: Transfer between company and related party treated as at market value     108

Clause 846: Transfers not at arm’s length     109

Clause 847: Transfers involving other taxes     109

Clause 848: Tax-neutral transfers     109

Clause 849: Transfers involving gifts of business assets     109

Clause 850: Part realisation involving related party acquisition: exclusion of roll-over relief     109

Clause 851: Delayed payment of royalty by company to related party     109

Chapter 14: Miscellaneous provisions     109

Clause 852: Treatment of grants and other contributions to expenditure     110

Clause 853: Grants to be left out of account for tax purposes     110

Clause 854: Finance leasing etc     110

Clause 855: Further provision about regulations under section 854     110

Clause 856: Assets acquired or realised together     110

Clause 857: Deemed market value acquisition: adjustment where nil accounting value     110

Clause 858: Fungible assets     111

Clause 859: Asset ceasing to be chargeable intangible asset: deemed realisation at market value     111

Clause 860: Asset ceasing to be chargeable intangible asset: postponement of gain     111

Clause 861: Treatment of postponed gain on subsequent realisation     111

Clause 862: Treatment of postponed gain in other cases     111

Clause 863: Asset becoming chargeable intangible asset     111

Clause 864: Tax avoidance arrangements to be ignored     112

Clause 865: Debits for expenditure not generally deductible for tax purposes     112

Clause 866: Delayed payment of employees’ remuneration     112

Clause 867: Provisions supplementing section 866     112

Clause 868: Delayed payment of pension contributions     113

Clause 869: Bad debts etc     113

Clause 870: Assumptions for calculating chargeable profits     113

Chapter 15: Adjustments on change of accounting policy     113

Clause 871: Introduction to Chapter     113

Clause 872: Adjustments in respect of change     113

Clause 873: Effect of application of section 872 in later period and subsequently     113

Clause 874: Original asset not subject to fixed-rate writing down     114

Clause 875: Effect of application of section 874 in later period and subsequently     114

Clause 876: Original asset subject to fixed-rate writing down     114

Clause 877: Election for fixed-rate writing down in relation to resulting asset     114

Clause 878: Exclusion of credits or debits brought into account under other provisions     114

Clause 879: Subsequent events affecting asset subject to adjustment under this Chapter     114

Chapter 16: Pre-FA 2002 assets etc     115

Clause 880: Overview of Chapter     115

Clause 881: Meaning of “pre-FA 2002 assets”     115

Clause 882: Application of this Part to assets created or acquired on or after 1 April 2002     116

Clause 883: Assets treated as created or acquired when expenditure incurred     116

Clause 884: Internally-generated goodwill: time of creation     116

Clause 885: Certain other internally-generated assets: time of creation     116