Section 727 | References to expenditure on an asset

(1)References in this Part to expenditure on an asset are to any expenditure (including abortive expenditure)—

(a)for the purpose of acquiring or creating, or establishing title to, the asset,

(b)by way of royalty in respect of the use of the asset, or

(c)for the purpose of maintaining, preserving or enhancing, or defending title to, the asset.

(2)No account may be taken of capital expenditure on tangible assets in determining for the purposes of this Part the amount of expenditure on an intangible asset.

(3)In subsection (2) “capital expenditure” has the same meaning as in CAA 2001.

(4)If expenditure is incurred partly as mentioned in subsection (1) or (2) and partly otherwise, any necessary apportionment must be made on a just and reasonable basis.