Part 7

Know-how allowances
Chapter 2

Qualifying expenditure

Excluded expenditure
455
1
Expenditure on the acquisition of know-how is not qualifying expenditure to the extent that it is otherwise deducted for tax purposes.
2
Expenditure on the acquisition of know-how is not qualifying expenditure if—
a
the buyer is a body of persons over whom the seller has control,
b
the seller is a body of persons over whom the buyer has control, or
c
the buyer and the seller are both bodies of persons and another person has control over both of them.
3
In subsection (2) “body of persons” includes a partnership.
4
Expenditure on the acquisition of know-how is not qualifying expenditure if it is treated as a payment for goodwill under section 531(2) of ICTA (consideration for know-how on disposal of trade to be treated as payment for goodwill, unless parties otherwise elect etc.).