Commentary

B5.348 Restrictive covenants

Business tax
Business tax | Commentary

B5.348 Restrictive covenants

Business tax | Commentary

B5.348 Restrictive covenants

The corporate tax treatment of intangible assets, including know-how, acquired or created on or after 1 April 2002 is set out in the corporate intangible regime as detailed in Division D1.6. The commentary below relates to pre-FA 2002 assets where it refers to corporation tax.

It is not possible to avoid the statutory provisions relating to know-how receipts by entering into restrictive covenants rather than some form of licence agreement or assignment, as any receipts from such a covenant would be taxable as a know-how receipt1. However, the treatment of the sum paid for a covenant as a

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