SCHEDULES

SCHEDULE 15 The corporate venturing scheme

Part III The issuing company

Excluded activities: receipt of royalties and licence fees

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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—

a

by the company carrying on the trade, or

b

by a company which at all times during which it created the asset was—

i

the parent company of the company carrying on the trade, or

ii

a qualifying subsidiary of that parent company.

4

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

For this purpose “normal accounting practice” means normal accounting practice in relation to the accounts of companies incorporated in any part of the United Kingdom.

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).