Income and Corporation Taxes Act 1988

Copyright and public lending right U.K.

534 Relief for copyright payments etc. U.K.

M1 (1) Where—

(a) an author of a literary, dramatic, musical or artistic work assigns the copyright in the work wholly or partially, or grants any interest in the copyright by licence; and

(b) the consideration for the assignment or grant consists wholly or partially of a payment to which this section applies, being a payment the whole amount of which would, but for this section, be included in computing the amount of his profits or gains for a single year of assessment; and

(c) the author was engaged on the making of the work for a period of more than 12 months;

he may, on making a claim, require that effect shall be given to the following provisions of this section in connection with that payment.

(2) If the period for which he was engaged on the making of the work does not exceed 24 months, then, for all income tax purposes, one-half only of the amount of the payment shall be treated as having become receivable on the date on which it actually became receivable, and the remaining half shall be treated as having become receivable 12 months before that date.

(3) If the period for which he was engaged on the making of the work exceeds 24 months, then, for all income tax purposes, one-third only of the amount of the payment shall be treated as having become receivable on the date on which it actually became receivable, and one-third shall be treated as having become receivable 12 months, and one-third 24 months, before that date.

(4) This section applies to—

(a) a lump sum payment, including an advance on account of royalties which is not returnable, and

(b) any payment of or on account of royalties or sums payable periodically,

except that it shall not by virtue of paragraph (b) above apply to payments in respect of the copyright in any work which only become receivable more than two years after its first publication.

[F1 (5) A claim under this section with respect to any payment to which it applies by virtue only of subsection (4)(b) above—

(a) shall have effect as a claim with respect to all qualifying payments, that is to say, all such payments in respect of the copyright in the same work which are receivable by the claimant, whether before or after the claim; and

(b) where qualifying payments are so receivable in two or more years of assessment, shall be treated for the purposes of the Management Act as if it were two or more separate claims, each in respect of the qualifying payments receivable in one of those years.

(5A) A claim under this section may be made at any time within one year from the 31st January next following—

(a) in the case of such a claim as is mentioned in subsection (5) above, the latest year of assessment in which a qualifying payment is receivable; and

(b) in the case of any other claim, the year of assessment in which the payment in question is receivable.

(5B) For the purposes of subsections (5) and (5A) above, a payment shall be regarded as receivable in the year of assessment in computing the amount of the profits or gains of which it would, but for this section, be included.]

(6) A claim cannot be made under this section in respect of a payment if a prior claim has been made under section 535 as respects that payment.

[F2 (6A) In the case of persons carrying on a trade, profession or business in partnership, no claim may be made under any of the following provisions, namely—

(a) this section and section 535;

(b) section 537 as it has effect in relation to this section and section 535; and

(c) section 537A and section 538,

in respect of any payment or sum receivable on or after 6th April 1996; and nothing in any of those provisions shall be construed as applying to profits chargeable to corporation tax.]

(7) In this section—

(a) “author” includes a joint author; and

(b) any reference to the first publication of a work is a reference to the first occasion on which the work or a reproduction of it is published, performed or exhibited.

Textual Amendments

F1 S. 534(5)-(5B) substituted for s. 534(5) (with effect in accordance with s. 128(11) of the amending Act) by Finance Act 1996 (c. 8), s. 128(5)

F2 S. 534(6A) inserted (29.4.1996) by Finance Act 1996 (c. 8), s. 128(6)

Marginal Citations

M1 Source-1970 s.389

535 Relief where copyright sold after ten years or more. U.K.

M2 (1) Where not less than ten years after the first publication of the work the author of a literary, dramatic, musical or artistic work assigns the copyright in the work wholly or partially, or grants any interest in the copyright by licence, and—

(a) the consideration for the assignment or grant consists wholly or partially of a lump sum payment the whole amount of which would, but for this section, be included in computing the amount of his profits or gains for a single year of assessment, and

(b) the copyright or interest is not assigned or granted for a period of less than two years,

he may by making a claim require that effect shall be given to the following provisions of this section in connection with that payment.

(2) Except where the copyright or interest is assigned or granted for a period of less than six years, the amount of the payment shall for income tax purposes be treated as becoming receivable in six equal instalments at yearly intervals the first of which becomes receivable on the date when the payment actually became receivable.

(3) Where the copyright or interest is assigned or granted for a period of less than six years, the amount of the payment shall for income tax purposes be treated as becoming receivable in a number of equal instalments at yearly intervals the first of which becomes receivable on the date when the payment actually became receivable, the number being the number of whole years in that period.

(4) F3 . . . If the author dies, any instalment which under this section would, but for the death, be treated as becoming receivable after the death shall for income tax purposes be treated as becoming receivable on the date when the last instalment before the death is to be treated as becoming receivable.

(5) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) If—

(a) the payment would, apart from this section, have been taken into account in assessing the profits or gains of a profession or vocation, and

(b) the profession or vocation is permanently discontinued (otherwise than on death) after the date on which the payment actually became receivable,

any instalment which under this section would, but for the discontinuance, be treated as receivable on a date after the discontinuance shall for income tax purposes be treated as becoming receivable when the last instalment before the discontinuance is to be treated as becoming receivable F5 . . . .

(7) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) In any case where—

(a) but for this section, the payment would be included in computing any profits or gains chargeable to tax under Case VI of Schedule D, and

(b) any amount would be deductible from that payment in computing those profits or gains (whether under the general provisions relating to Case VI or under section 105(1)),

the amount which, under this section, is to be treated as receivable in instalments shall be the amount of the payment after that deduction, and effect shall not be given to that deduction in any other way.

[F6 (8A) No claim for relief made under subsection (1) above shall be allowed unless it is made within one year from the 31st January next following the year of assessment in which the payment is receivable; and for the purposes of this subsection a payment shall be regarded as receivable in the year of assessment in computing the amount of the profits or gains of which it would, but for this section, be included.]

(9) A claim cannot be made under this section in respect of a payment if a prior claim has been made under section 534 as respects that payment.

(10) Where it is necessary, in order to give effect to a claim or election under this section, or as a result of the claim or election, to make any adjustment by way of an assessment on any person, the assessment shall not be out of time if it is made within one year of the final determination of the claim or, as the case may be, within one year from the giving of notice of the election.

(11) In this section—

• “author” includes a joint author;

• “lump sum payment” includes an advance on account of royalties which is not returnable;

and any reference to the first publication of a work is a reference to the first occasion on which the work or a reproduction of it is published, performed or exhibited.

Textual Amendments

F3 Words in s. 535(4) repealed (with effect in accordance with s. 128(11) of the repealing Act) by Finance Act 1996 (c. 8), s. 128(7)(a), Sch. 41 Pt. 5(6), Note 1

F4 S. 535(5)(7) repealed (with effect in accordance with s. 128(11) of the repealing Act) by Finance Act 1996 (c. 8), s. 128(7)(b), Sch. 41 Pt. 5(6), Note 1

F5 Words in s. 535(6) repealed (with effect in accordance with s. 128(11) of the repealing Act) by Finance Act 1996 (c. 8), s. 128(7)(c), Sch. 41 Pt. 5(6), Note 1

F6 S. 535(8A) inserted (with effect in accordance with s. 128(11) of the amending Act) by Finance Act 1996 (c. 8), s. 128(8)

Marginal Citations

M2 Source-1970 s.390

536 Taxation of royalties where owner abroad. U.K.

M3 (1) Subject to the provisions of this section, where the usual place of abode of the owner of a copyright is not within the United Kingdom, section 349(1) shall apply to any payment of or on account of any royalties or sums paid periodically for or in respect of that copyright as it applies to annual payments not payable out of profits or gains brought into charge to income tax.

(2) In subsection (1) above—

• [F7 “copyright” does not include copyright in—

  (i)

  a cinematograph film or video recording, or

  (ii)

  the sound-track of such a film or recording, so far as it is not separately exploited; and]

• “owner of a copyright” includes a person who, notwithstanding that he has assigned a copyright to some other person, is entitled to receive periodical payments in respect of that copyright;

and the reference to royalties or sums paid periodically for or in respect of a copyright does not include royalties or sums paid in respect of copies of works which F8 . . . have been exported from the United Kingdom for distribution outside the United Kingdom.

(3) Subject to subsection (4) below, where any payment to which subsection (1) above applies is made through an agent resident in the United Kingdom and that agent is entitled as against the owner of the copyright to deduct any sum by way of commission in respect of services rendered, the amount of the payment shall for the purposes of section 349(1) be taken to be diminished by the sum which the agent is so entitled to deduct.

(4) Where the person by or through whom the payment is made does not know that any such commission is payable or does not know the amount of any such commission, any income tax deducted by or assessed and charged on him shall be computed in the first instance on, and the account to be delivered of the payment shall be an account of, the total amount of the payment without regard being had to any diminution thereof F9 . . . .

(5) The time of the making of a payment to which subsection (1) above applies shall, for all tax purposes, be taken to be the time when it is made by the person by whom it is first made and not the time when it is made by or through any other person.

(6) Any agreement for the making of any payment to which subsection (1) above applies in full and without deduction of income tax shall be void.

Textual Amendments

F7 Words in s. 536(2) substituted (1.8.1989) by Copyright, Designs and Patents Act 1988 (c. 48), Sch. 7 para. 36(5); S.I. 1989/816, art. 2

F8 Words in s. 536(2) repealed (with effect in accordance with s. 103(7) of the repealing Act) by Finance Act 1995 (c. 4), s. 115(10)(a), Sch. 29 Pt. 8(14), Note 2

F9 Words in s. 536(4) repealed (with effect in accordance with s. 103(7) of the repealing Act) by Finance Act 1995 (c. 4), s. 115(10)(b), Sch. 29 Pt. 8(14), Note 2

Modifications etc. (not altering text)

C1 See—1988 s.387—sums assessed under s.350by virtue of s.536not to be carried forward under s.387as trading losses.1988 s.821—under-deductions of tax from payments made before passing of annual Act.S.I. 1970 No.488 (under

“Double Taxation relief: general”

in Part III Vol.5) regns.2-10—payments exempt under double taxation agreements.

Marginal Citations

M3 Source-1970 s.391

537 Public lending right. U.K.

M4 Sections 534, 535 and 536 shall have effect in relation to public lending right as they have effect in relation to copyright.

Marginal Citations

M4 Source-1983 s.27(b)