Corporation Tax Act 2010 section 357BK

Marketing assets return figure

Section 357BK explains how to calculate the marketing assets return figure for a relevant IP income sub-stream, and sets out the circumstances in which that figure is treated as nil.

• The marketing assets return figure is calculated as the notional marketing royalty (NMR) minus the actual marketing royalty (AMR) for each relevant IP income sub-stream.
• The notional marketing royalty represents a hypothetical arm's length royalty for the use of marketing assets associated with the sub-stream, while the actual marketing royalty reflects any real royalty the company pays for such assets.
• If the actual marketing royalty exceeds the notional marketing royalty, the marketing assets return figure is set to nil rather than producing a negative amount.
• The figure is also set to nil where the difference between the two royalties is less than 10% of the relevant IP income sub-stream after the mandatory deductions at Step 4 of section 357BF(2), acting as a de minimis threshold.