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Chapter BIM56206

Document Cited authorities 1 Cited in Related
Vincent
Published date22 November 2013
Record NumberBIM56206

S130, S134 Income Tax (Trading and Other Income) Act 2005, S150, S152 Corporation Tax Act 2009

As explained in BIM56205, expenditure on the production or acquisition of an original master version would, in the absence of statutory rules, be expenditure on the provision of a fixed asset subject to the capital allowances rules for plant. Expenditure incurred ‘on the production’ or ‘on the acquisition’ of an original master version should therefore be construed in the same way as expenditure ‘on the provision’ of plant and machinery for capital allowance purposes.

This means that the qualifying expenditure incurred ‘on the production’ or ‘on the acquisition’ of an original master version should be interpreted narrowly. The case of Ben-Odeco Ltd v Powlson [1978] 52TC459 showed that remote or indirect expenditure does not satisfy this condition, and therefore does not qualify for treatment under the special rules for master versions (see CA20060).

Costs such as the legal costs of drawing up a contract to...

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