Section 723 — Corporation Tax Act 2009: Revaluation

Revaluation 723 1 If in a period of account there is an increase in the accounting value of an intangible fixed asset on a revaluation, a credit must be brought into account for tax purposes.

2 The amount of the credit is the lesser of—

a the amount corresponding for tax purposes to the increase (see subsection (3)),

and b the net total of relevant previous tax debits (see subsection (4)).

3 The amount corresponding for tax purposes to the increase is— I × WDV AV where— I is the increase, WDV is the tax written-down value of the asset immediately before the revaluation, and AV is the accounting value of the asset by reference to which the revaluation is carried out.

4 The net total of relevant previous tax debits is— D - C where— D is the total debits previously brought into account for tax purposes in respect of the asset, and C is the total credits so brought into account.

5 For the purposes of this section “ revaluation ” includes—

a the valuation of an asset for which a value is shown in the company's balance sheet, but which has not previously been the subject of a valuation, and b the restoration of past losses.

6 This section does not apply to an asset in respect of which an election has been made under section 730 (writing down at fixed rate: election for fixed-rate basis).