Corporation Tax Act 2009 section 732

Reversal of previous accounting gain

Section 732 provides tax relief where a company's accounts recognise a loss that reverses a gain on an intangible fixed asset that was previously taxed.

• Where an accounting loss reverses a previously taxed accounting gain on an intangible fixed asset, a corresponding tax debit must be brought into account
• The debit is calculated as: Recognised Loss × (Previous Credit ÷ Reversed Gain), ensuring the relief is proportionate to the tax originally charged
• If the full accounting gain was taxed in the earlier period, the debit will simply equal the accounting loss; if only part was taxed, the debit is scaled down accordingly
• This relief does not apply where the loss arises from amortisation or an impairment review of an asset that has previously been revalued