Tax | Intellectual Property
The tax aspects must be considered when entering into transactions involving intellectual property, whether acquiring, disposing of or licencing intellectual property, or transferring or licencing intellectual property rights intra-group.
The UK tax treatment of intellectual property has been subject to significant shifts, particularly as a result of changes introduced in the Finance Act 2016, which significantly broadened the scope of UK withholding tax on royalties payable to non‑UK resident licensors. UK residents making such payments must be aware of these rules.
Conversely, there is a wide range of UK tax reliefs which are potentially available for UK entities acquiring and creating intellectual property rights.
Our expertise
We work with colleagues with expertise in the acquisition, disposal and protection of intellectual property rights to advise on the relevant UK tax issues, including:
- whether withholding tax is payable on royalties
- whether withholding tax liabilities could be mitigated or avoided by an application for double tax relief
- the application of relevant tax reliefs, including patent box and research and development reliefs
Our experience
We have advised on the following:
- corporation tax relief on acquisitions of intellectual property governed by the intangible fixed assets rules
- liability to withholding tax on royalty payments to a non‑UK resident licensor and the circumstances in which liability for such withholding tax could be mitigated or avoided by application for double tax relief
- structuring a collaboration agreement between a major non-UK investor and an AIM-listed company for the development of bio-medical products leading to clinical trials, so as to ensure that EIS investors continue to qualify for relief
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