Paragraph 29

United Kingdom

(1)

This paragraph supplements paragraph 26(1)(d) so far as it relates to the receipt of royalties and licence fees.

(2)

A trade shall not be regarded as not being a qualifying trade by reason only that at some time in the qualification period relating to the relevant shares it consists to a substantial extent in the receiving of royalties or licence fees if the royalties and licence fees (or all but for a part that is not a substantial part in terms of value) are attributable to the exploitation of relevant intangible assets.

(3)

For this purpose an intangible asset is a “relevant intangible asset" if the whole or greater part (in terms of value) of it has been created—

F1(a)

by the issuing company, or

(b)

by a company which was a qualifying subsidiary of the issuing company throughout a period during which it created the whole or greater part (in terms of value) of the intangible asset.

(4)

In this paragraph “intangible asset” means any asset which falls to be treated as an intangible asset in accordance with F2generally accepted accounting practice.

F3. . . .

(5)

In the case of a relevant asset that is intellectual property, references in this paragraph to the creation of the asset by a company are to its creation in circumstances in which the right to exploit it vests in the company (whether alone or jointly with others).

(6)

In sub-paragraph (5) “intellectual property” means—

(a)

any patent, trade mark, registered design, copyright, design right, performer’s right or plant breeder’s right; and

(b)

any rights under the law of a country or territory outside the United Kingdom which correspond or are similar to those falling within paragraph (a).

F4(7)

If—

(a)

the issuing company acquired all the shares (“old shares”) in another company (“the old company”) at a time when the only shares issued in the issuing company were subscriber shares, and

(b)

the consideration for the old shares consisted wholly of the issue of shares in the issuing company,

references in sub-paragraph (3) to the issuing company include the old company.

Annotations

Textual amendments

F1: Sch. 15 para. 29(3)(a)(b) substituted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), Sch. 16 paras. 9(2), 13
F2: Words in Sch. 15 para. 29(4) substituted (24.7.2002) by 2002 c. 23, s. 103(4)(f)
F3: The second sentence in Sch. 15 para. 29(4) repealed (24.7.2002) by 2002 c. 23, s. 141, Sch. 40, Pt. 3(16)
F4: Sch. 15 para. 29(7) inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), Sch. 16 paras. 9(3), 13