Corporation Tax Act 2009 section 779

Rules that apply to cases within section 778(1)

Section 779 sets out the detailed rules for how reinvestment relief works when a company acquires shares in another company that holds intangible fixed assets, as introduced by section 778.

• When company A buys shares in company B, the expenditure is treated as if it were spent on acquiring the underlying intangible assets held by B, capped at the lower of the assets' tax written-down value or the actual consideration paid.
• The underlying assets qualify as chargeable intangible assets for relief purposes provided they are chargeable intangible assets in relation to the company that holds them immediately after the share acquisition.
• The tax written-down value of the underlying assets in the hands of the holding company is reduced by the amount of relief claimed.
• Where there is more than one underlying asset or more than one holding company, the holding company may decide how the relief reduction is allocated across the assets, and where multiple companies are involved, they may agree the allocation between them.