Tax issues and incentives arising from assignment and licensing of IP
Produced in partnership with Anne Fairpo

The following Tax practice note produced in partnership with Anne Fairpo provides comprehensive and up to date legal information covering:

  • Tax issues and incentives arising from assignment and licensing of IP
  • Assignment of IP
  • Corporate intangibles rules
  • Individuals and other non-corporates, and pre-1 April 2002 IP assets outside the corporate intangibles regime
  • Stamp duty
  • Licensing of IP
  • Royalties
  • Restrictions for those exploiting IP developed by others
  • VAT
  • Cross-border—businesses
  • More...

Tax issues and incentives arising from assignment and licensing of IP

The UK has two approaches to taxing IP transactions:

  1. the corporate intangibles tax rules: these apply to IP created or acquired by a company on or after 1 April 2002 (unless the asset was acquired before 1 July 2020 from a related party that owned the asset before 1 April 2002). These rules generally follow the accounting treatment of the IP and, in particular, allow the company to write off the cost of acquisition of IP against tax over its useful economic life through amortisation deductions

  2. a mixture of general tax rules, with a few specific IP rules: these apply to IP owned by individuals and non-corporate entities, and to IP assets created or acquired by a company before 1 April 2002 (or acquired before 1 July 2020 from a related party that owned the asset before 1 April 2002). These do not specifically follow the accounting treatment, provide very little deduction for the costs of acquiring IP, and are found in various places around the Taxes Acts

In most cases, it will be obvious whether a company’s IP assets are pre- or post-1 April 2002 but some care needs to be taken to trace ownership where assets have been acquired from related parties, to determine whether the asset was created by the related party

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