UK tax aspects of cross-border IP structuring—development and acquisition of IP
Produced in partnership with Anne Fairpo of Temple Tax Chambers
UK tax aspects of cross-border IP structuring—development and acquisition of IP

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

  • UK tax aspects of cross-border IP structuring—development and acquisition of IP
  • Creating or acquiring IP—basic UK corporation tax treatment of expenditure
  • Enhanced relief for R&D expenditure by a UK company
  • Overview of R&D relief for revenue expenditure
  • Connected subcontractor payments—transfer pricing
  • Going concern and trading requirements
  • R&D capital allowances for capital expenditure
  • Acquisition and development of IP with a view to future exploitation
  • UK patent box and its interaction with R&D

In 2013 the UK government introduced its flagship patent box relief from corporation tax as part of the UK's wider bid to be one of the world's most attractive environments for innovation and enterprise.

Alongside such other tax benefits as:

  1. R&D tax reliefs

  2. business asset disposal relief (formerly entrepreneurs' relief)

  3. capital allowances for purchases of:

    1. knowhow

    2. patents, and

    3. plant and machinery

  4. the enterprise investment scheme, and

  5. the seed enterprise investment scheme

there are now tax breaks in the UK for each stage in the life-cycle of an innovative business.

This Practice Note sets out the UK perspective on various tax issues that should be taken into account in deciding how an innovative business with global ambition might be structured. The points below are generic and effectively assume a blank canvas; restructuring an existing IP-ownership set-up will obviously require a tailored approach (especially in the context of joint ventures or consortia), but the following points will still be likely to need consideration.

The focus of this Practice Note is on businesses developing and/or intending to acquire IP. Please also, see Practice Note: UK tax aspects of cross-border IP structuring—exploitation of IP, which sets out generic considerations for businesses exploiting IP. Those considerations will be relevant to businesses developing or acquiring IP with a view to future exploitation.

Creating or acquiring IP—basic UK corporation tax treatment of expenditure

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