Income and Corporation Taxes Act 1988

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