Report a sale or write-down of intangible assets on your CT600
Short version. Report the accounting result of an intangible asset sale separately from its Corporation Tax realisation credit or debit. Answer Yes to the intangible asset event question so the relevant draft CT600 shows box 640. You can check the draft before subscribing.
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1. Complete the task
- Prepare the accounts profit or loss on disposal and the Part 8 tax credit or debit. A £1 transfer price does not by itself establish either result.
- In the financial figures, use Profit on disposal of intangible assets and Loss on disposal of intangible assets for the accounts results. Both can be entered when different assets produced a gain and a loss. Do not put them in Profit on disposal of fixed assets.
- In Tax adjustments, answer Yes to “Did the company sell, write down or otherwise realise any intangible assets in this period?”. Enter the prepared realisation credit or debit under trade, property business or non-trading, as applicable. Leave a field at zero when that route has no amount. Do not enter an artificial amortisation or impairment deduction.
- If your accounts cover more than twelve months, divide each book and tax amount between the two Corporation Tax returns in “Divide intangible asset amounts between your two tax returns”. Then choose Return 1, Return 2 or Both for the box 640 event.
- If a non-trading debit exceeds the credits, review the current and brought-forward loss claims for each return. An unclaimed loss can carry forward unless the section 753(4) cessation rule applies. Use prepared figures for these decisions.
2. Check the result
Open the free draft preview. Check the separate accounts gain and loss rows, the tax computation adjustment and box 640 on each CT600. A non-trading gain appears in box 195, a section 753 loss claim in box 265 and a loss arising in the period in box 830. For a long period, check both returns and their computations before filing.
This is general guidance. The director remains responsible for the prepared Part 8 amounts, the route and the return allocation. See how realisation credits and debits are treated for the tax background.