CT600 Box 275: Non-Trading Losses on Intangible Assets
Box 275 on the CT600 is for non-trading losses on intangible fixed assets. This is the opposite of Box 195 (gains) and applies when your company disposes of intangible assets at a loss.
What Goes in Box 275?
Box 275 captures losses arising from intangible assets held outside of a trade. This includes losses on:
- Patents sold for less than cost
- Trademarks that have diminished in value
- Goodwill written off
- Licences surrendered or expired
- Intellectual property disposed of at a loss
Understanding Intangible Asset Losses
What Creates a Loss?
A loss arises when:
``` Disposal proceeds < Tax written down value ```
Example
| Item | Amount |
|---|---|
| Original cost of patent | £50,000 |
| Tax amortisation claimed | (£20,000) |
| Tax written down value | £30,000 |
| Sale proceeds | £15,000 |
| Loss | £15,000 |
Types of Intangible Assets
Assets Covered
| Asset Type | Box 275 Applies? |
|---|---|
| Patents (non-trade) | Yes |
| Trademarks | Yes |
| Copyrights | Yes |
| Goodwill (post-April 2002) | Yes |
| Licences | Yes |
| Know-how | Yes |
Pre-April 2002 Assets
Intangible assets acquired before April 2002 follow different (capital gains) rules and don't create Box 275 entries.
When Box 275 Applies
Scenarios Creating Box 275 Entries
- Sale at a loss - Asset sold for less than book value
- Impairment - Asset written down due to reduced value
- Abandonment - Asset surrendered or allowed to lapse
- Expiry - Time-limited rights expiring worthless
Non-Trading Requirement
The asset must be held outside of a trade:
- Investment in IP as a side activity
- Patents not used in company's main business
- Assets held by holding companies
How Losses Are Used
Relief Options
Non-trading intangible losses can be:
- Set against non-trading intangible gains (same period)
- Set against total profits (current period)
- Carried back to previous periods
- Carried forward to future periods
Example: Current Year Set-Off
| Item | Amount |
|---|---|
| Trading profits | £80,000 |
| Non-trading intangible gains (Box 195) | £20,000 |
| Non-trading intangible loss (Box 275) | (£25,000) |
| Net position | Remaining loss of £5,000 |
Calculating Box 275
Step-by-Step
- Identify intangible asset disposed of
- Confirm it was non-trading
- Calculate proceeds minus tax value
- If negative, enter loss in Box 275
Worked Example
A company holds a trademark as an investment:
| Item | Amount |
|---|---|
| Acquired for | £40,000 |
| Amortised over 5 years (£8,000/year) | (£24,000) |
| Tax written down value | £16,000 |
| Sold for | £5,000 |
| Loss for Box 275 | £11,000 |
Box 275 vs Box 195
| Box | Purpose |
|---|---|
| 195 | Non-trading intangible gains |
| 275 | Non-trading intangible losses |
- Profit on sale → Box 195
- Loss on sale → Box 275
Related Boxes
| Box | Description |
|---|---|
| 195 | Non-trading intangible gains |
| 275 | Non-trading intangible losses (this box) |
| 285 | Trading losses (for trade-related intangibles) |
| 295 | Donations to grassroots sports |
Most Small Companies: Box 275 = Zero
For typical small trading companies:
- Intangible assets are usually trade-related
- Few companies hold IP investments separately
- Goodwill is typically only relevant on business sale
- No separate intangible investment portfolios
Common Questions
My company developed software we're writing off - is that Box 275?
Probably not. If the software was developed for your trade, any write-off would be a trading expense, not a Box 275 item.
We sold our trademark - where does the loss go?
It depends on use:
- If the trademark was used in your trade → Trading loss
- If it was an investment asset → Box 275
What about goodwill when closing a business?
Goodwill losses on cessation are complex:
- Post-April 2002 goodwill → May be Box 275
- Pre-April 2002 goodwill → Capital gains rules
- Seek professional advice for business closures
My company acquired another company's IP and it's now worthless - Box 275?
If the IP was:
- Acquired post-April 2002
- Held as a non-trading investment
- Now being disposed of at a loss
When Using TinyTax
TinyTax focuses on standard trading company scenarios:
- Most TinyTax users don't have non-trading intangible assets
- Trade-related intangibles are handled through normal expenses
- Complex intangible asset transactions require specialist input
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