Part 6Venture capital trusts
Chapter 4Qualifying holdings
Excluded activities
306Excluded activities: receipt of royalties and licence fees
1
This section supplements section 303(1)(e) (receipt of royalties and licence fees).
2
If the requirement of subsection (3) is met, a trade is not to be regarded as consisting in the carrying on of excluded activities within section 303(1)(e) as a result only of its consisting to a substantial extent in the receiving of royalties or licence fees.
3
The requirement of this subsection is that the royalties or 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.
4
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 intangible asset was—
i
the holding company of the company carrying on the trade, or
ii
a company which, if that holding company were the relevant company, would be a qualifying subsidiary of that company.
5
In the case of an intangible asset that is intellectual property, references to the creation of an 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 this section—
“holding company” means a company that—
- a
has one or more 51% subsidiaries, but
- b
is not itself a 51% subsidiary of another company,
- a
“intangible asset” means any asset which falls to be treated as an intangible asset in accordance with generally accepted accountancy practice, and
“intellectual property” means—
- a
any patent, trade mark, registered design, copyright, design right, performer’s right or plant breeder’s right, or
- 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).
- a