(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—
has one or more 51% subsidiaries, but
is not itself a 51% subsidiary of another company,
“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—
any patent, trade mark, registered design, copyright, design right, performer’s right or plant breeder’s right, or
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).