SCHEDULES
SCHEDULE 25F1Cases where section 747(3) does not apply
F2Part 2BCompanies Exploiting Intellectual Property with Limited UK Connection
Sch. 25 Pts. 2A, 2B (paras. 12B-12N) inserted (with effect in accordance with Sch. 12 para. 14(2) of the amending Act) by Finance Act 2011 (c. 11), Sch. 12 para. 3
UK connection
12L
1
The requirement of this paragraph is that C does not have a significant connection with the United Kingdom during the accounting period.
2
C has a significant connection with the United Kingdom during the accounting period if—
a
all or a substantial proportion of C's gross income for that period consists of income from the exploitation of intellectual property which derives from persons within the charge to United Kingdom tax, or
b
during that period C incurs expenditure (other than expenditure of an incidental or insignificant nature) on—
i
R&D sub-contractor payments, or
ii
the creation, development or maintenance of relevant intellectual property,
and that expenditure forms part of the income of a person who for some or all of that period is related to C and within the charge to United Kingdom tax.
3
In this paragraph—
“R&D sub-contractor payment” means a payment made by C to another person in respect of research and development contracted out by C to that person;
“relevant intellectual property” means intellectual property which does not have a relevant UK connection (see paragraph 12J(3)) and which C exploits in the course of its main business.
Sch. 25 heading substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 25; S.I. 1998/3173, art. 2