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.
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.