Section 740 | Abortive expenditure on realisation

(1)This section applies if—

(a)in a period of account a loss is recognised in determining the company's profit or loss in respect of expenditure by the company for the purposes of a transaction,

(b)the transaction does not proceed to completion, but

(c)were it completed, it would constitute a realisation of an intangible fixed asset.

(2)A corresponding debit must be brought into account for tax purposes.

(3)The amount of the debit is the same as the amount of the loss recognised by the company for accounting purposes.

(4)Subsection (3) is subject to any adjustments required by this Part or Part 4 of TIOPA 2010 (provision not at arm's length).