Part 13Tax avoidance
Chapter 5Avoidance involving trading losses
Individuals in partnership claiming relief for licence-related trading losses
808Meaning of “disposal of the licence” etc
1
For the purposes of section 805 any reference to—
a
a disposal of a licence acquired in carrying on a trade, or
b
a disposal of a right to income under an agreement related to or containing a licence acquired in carrying on a trade (“a licence-related agreement”),
includes, in particular, any of events A to E.
2
Event A is the revocation of the licence.
3
Event B is the disposal, giving up or loss of—
a
a right under the licence, or
b
a right to income (or any part of any income) under a licence-related agreement,
by the individual or by a firm in which the individual is a partner.
It does not matter if the right is disposed of, given up or lost as part of a larger disposal, giving up or loss.
4
Event C is the disposal, giving up or loss of the individual's interest in a firm that has the licence or a right to income under a licence-related agreement (including the dissolution of the firm).
5
Event D is a default in the payment of income to which—
a
the individual, or
b
a firm in which the individual is a partner,
has a right under a licence-related agreement.
6
Event E is a change in the individual's entitlement to any profits or losses relating to the licence the effect of which is that—
a
the individual's share of any profits is reduced (including to nil), or
b
the individual becomes entitled to a share, or a greater share, of any losses without becoming entitled to a corresponding share of profits.
7
The changes covered by event E include cases where there is an agreement under which the individual is entitled—
a
to a particular share of any profits or losses relating to the licence in a period (including a nil share), and
b
to a different share of any such profits or losses in a succeeding period (including a nil share).
8
In such cases the change in the individual's entitlement is treated for the purposes of section 805 as occurring at the beginning of the succeeding period.
9
For the purposes of this section—
a
references to any profits relating to the licence are to any profits deriving to any extent from income to which the individual has a right under a licence-related agreement, and
b
references to any losses relating to the licence are to losses deriving to any extent from expenditure incurred in exploiting the licence.