This section supplements section 192(1)(e) (receipt of royalties and licence fees).

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 192(1)(e) as a result only of its consisting to a substantial extent in the receiving of royalties or licence fees.

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.

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).

In this section—

• F2...

• “intangible asset” means any asset which falls to be treated as an intangible asset in accordance with generally accepted accountancy practice,

• “intellectual property” means—

  1. a

     any patent, trade mark, registered design, copyright, design right, performer's right or plant breeder's right, or

  2. 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).