The following IP guidance note provides comprehensive and up to date legal information covering:
The IFA regime was introduced in 2002 for the purposes of taxing companies in respect of their intangible fixed assets, which are broadly:
intellectual property (IP), and
created or acquired (from an unrelated party) on or after 1 April 2002 (for more details, see Practice Notes: What is an intangible fixed asset? and Excluded intangible fixed assets).
The IFA regime aims to tax and relieve profits and losses in respect of intangible assets as income, generally in accordance with accounting principles. The IFA regime typically provides more opportunities for corporation tax relief than was previously the case. For more details, see Practice Notes: How intangible fixed assets are taxed—basic principles and Intangible fixed assets—anti-avoidance.
Before the introduction of the IFA regime, companies were subject to corporation tax in respect of intangible assets on the basis of general tax principles (largely enshrined in case law) that still apply for individuals. Broadly, outside of the IFA regime, acquisitions and disposals of IP (other than patents) held otherwise than as trading stock are typically subject to chargeable gains tax treatment, whilst the payment and receipt of royalties is taxed as income.
Companies invested in intangible assets outside of the IFA regime benefit from only limited tax reliefs.
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