Capital allowances for intangible assets

About this scheme

Capital allowances for intangible assets (Section 291A relief) let a company claim capital allowances on capital expenditure incurred on specified intangible assets, such as patents, copyrights, trademarks and know-how, with the full list set out in Revenue's Tax and Duty Manual. These assets are treated as plant and machinery for capital allowances purposes, and a company can claim either the amortisation and impairment charged in its accounts each period, or elect a fixed 15-year write-down at 7% of qualifying expenditure per year and 2% in the final year. Ring-fencing rules restrict use of the resulting allowances to income from 'relevant activities' involving those assets, treated as a separate 'relevant trade'. For expenditure incurred on or after 11 October 2017, the deduction claimable in an accounting period is capped at 80% of the relevant trade's trading income for that period; Finance Act 2025 extended both the ring-fencing rules and the 80% cap to balancing allowances, for balancing events on or after 8 October 2025. The relief is claimed through the company's Corporation Tax return; normal self-assessment rules apply.

Who can apply

• Available to companies incurring capital expenditure on 'specified intangible assets' (e.g. patents, copyrights, trademarks, and know-how); see Revenue's Tax and Duty Manual Part 09-02-05, Appendix 1, for the full list
• Capital allowances arising on specified intangible assets can only be offset against income from 'relevant activities' using those assets (ring-fencing rules) — managing, developing and exploiting the assets, or selling goods/services that derive most of their value from them; these activities are treated as a separate 'relevant trade'
• Specified intangible assets are treated as plant and machinery for capital allowances purposes
• The company may claim either the amortisation/impairment charged in its profit and loss account each accounting period, or elect a fixed 15-year write-down of 7% per year plus 2% in the final year
• For capital expenditure incurred on or after 11 October 2017, the allowance claimed in an accounting period cannot exceed 80% of the trading income of the relevant trade for that period
• Finance Act 2025 extended the ring-fencing rules and the 80% cap to balancing allowances on specified intangible assets, for balancing events on or after 8 October 2025

How to apply

1. 1Incur qualifying capital expenditure on a specified intangible asset (see Tax and Duty Manual Part 09-02-05 for the full list of qualifying assets).
2. 2Decide whether to claim the allowance based on the amortisation/impairment charged in the company's accounts each period, or elect for the fixed 15-year write-down (7% per year, 2% in the final year).
3. 3Claim the allowance through the company's Corporation Tax return of income form (CT1), subject to the ring-fencing rules and the 80% cap on the relevant trade's trading income; no pre-approval is required, as normal self-assessment tax provisions apply.