Section 417 | The capital (expenditure) adjustment F1
From legislation.gov.uk
16 November 2017
(1)For the purposes of section 416, “the capital (expenditure) adjustment” is—F1
Formula
where—
A is the sum of the amounts (if any) in respect of relevant capital expenditure which are brought into account in determining the group's profit before tax;
B is the sum of the amounts (if any) in respect of relevant capital expenditure reversals which are brought into account in determining the group's profit before tax;
C is the sum of the amounts (if any) in respect of relevant capital income which are brought into account in determining the group's profit before tax.
(2)In this section “relevant capital expenditure” means—F1
(a)expenditure of a capital nature that relates to relevant assets (including any relevant expense amounts previously included in the carrying value of relevant assets) that is recognised in the relevant period of account by way of depreciation or amortisation, or as the result of an impairment review,F1
(b)expenditure of a capital nature that relates to relevant assets that is incurred and recognised in the relevant period of account, andF1
(c)amounts recognised in the relevant period of account by way of provision in respect of future expenditure of a capital nature that relates to relevant assets.F1
(3)In this section “relevant capital expenditure reversals” means the reversal in the relevant period of account of any relevant capital expenditure recognised in an earlier period of account.F1
(4)In this section “relevant capital income” means income of a capital nature that relates to relevant assets.F1
(5)In this Chapter “relevant asset” means an asset that is—F1
(a)plant, property and equipment,F1
(b)an investment property,F1
(c)an intangible asset,F1
(d)goodwill,F1
(e)shares in a company, orF1
(f)an interest in an entity which entitles the holder to a share of the profits of the entity.F1
(6)In subsection (5)—F1
(a)“plant, property and equipment” has the meaning it has for accounting purposes;F1
(b)“investment property” has the meaning it has for accounting purposes;F1
(c)“intangible asset” has the meaning it has for accounting purposes (and includes an internally-generated intangible asset);F1
(d)“goodwill” has the meaning it has for accounting purposes (and includes internally-generated goodwill);F1
(e)“entity” includes anything which is treated as an entity in the financial statements of the group (regardless of whether it has a legal personality as a body corporate).F1
Section 712(2) and (3) of CTA 2009 (“intangible asset” includes intellectual property) applies for the purposes of paragraph (c).
(7)An amount does not fall within A in subsection (1) if it is brought into account in determining a profit or loss on the disposal of a relevant asset.F1