Valuing IP
Produced in partnership with Anne Fairpo of Temple Tax Chambers
Valuing IP

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

  • Valuing IP
  • Introduction
  • Comparison approach
  • Example (substantially simplified)
  • Limitations of the comparison approach
  • Income approach
  • Discounted cashflow
  • Royalty relief
  • Premium profits
  • Excess earnings
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for intellectual property?

Introduction

Valuation is required at many points in the lifecycle of an intellectual property (IP) asset, and for many different purposes, including:

  1. sale and purchase of a business (including mergers), either on the sale of shares or on the sale of the trade and assets of a business

  2. sale and purchase of the IP (to establish an appropriate price and to deal with accounting matters)

  3. litigation settlements/awards (to establish appropriate compensation)

  4. insolvency (to establish the value of the assets of the insolvent business)

  5. financial reporting requirements (for example, to confirm the current value of IP on the balance sheet)

  6. for tax purposes, including:

    1. on transfer to a non-UK connected party—see Practice Note: Tax issues and incentives arising from assignment and licensing of IP

    2. on transfer between UK connected parties where the two parties are not both companies—see Practice Note: Tax issues

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