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UK: Updated intangible assets manual to reflect Finance Act 2026 changes

Finance Act 2026 changes effective January 1, 2026

april 30, 2026

HMRC has updated the intangible assets manual to reflect the main changes made by Finance Act 2026, which came into effect for transfers and grants of rights in intangible fixed assets (IFAs) made on or after January 1, 2026.

The main changes include:

  • Adoption of a single valuation standard being the arm’s length value for transactions within the scope of the transfer pricing rules that also meet the definition of a “cross-border” transaction, and market value for all other cases, both for related-party transactions (starting at CIRD45000) and a number of other scenarios including share schemes and realizations for non-monetary consideration (starting at CIRD48320).
  • Update to CIRD12780 focused on the acquisitions of intangible assets at nil or negligible value and re-casting to either arm’s length or market value (as appropriate). 
  • HMRC’s acknowledgement of the “one-way street” approach to adjustments of related-party licenses (at CIRD45050), in contrast to transfers of intangibles which have retained their “two-way street” approach.
  • Additional comments on the application of CIRD12780 to merger accounting, which can result in assets being acquired at their book rather than fair value and was previously complex to analyze under the IFA regime. 

Read an April 2026 report prepared by the KPMG member firm in the UK

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