Cinnabar Ltd requires advice on the corporation tax treatment of the sale of an intangible asset.

Cinnabar Ltd:
– Is a UK resident trading company.
– Has one wholly-owned UK subsidiary, Lapis Ltd.

Sale of an intangible asset to Lapis Ltd:
– The intangible asset was acquired by Cinnabar Ltd in May 2010 for £82,000.

– The asset was sold to Lapis Ltd on 1 November 2014 for its market value on that date of £72,000, when its tax written down value was £65,600.

Required:
(ii) Explain the corporation tax implications for Cinnabar Ltd of the sale of the intangible asset to Lapis Ltd. (2 marks)