Corporation Tax Act 2010 section 357BM

Profits arising before grant of right

Section 357BM allows a company that holds (or would have held) a qualifying IP right or exclusive licence to elect that an additional amount is added to its relevant IP profits in the accounting period when the right is granted, to reflect profits that arose before the grant.

• A company holding a qualifying IP right or exclusive licence (or one that disposed of such rights before the grant) may elect to add an "additional amount" to its relevant IP profits in the period the right is granted.
• The additional amount is the difference between the actual aggregate relevant IP profits across all relevant accounting periods and what those profits would have been had the right been granted on the "relevant day".
• The relevant day is the later of the first day of the six-year period ending on the grant date, or the date the application was filed (or, for an exclusive licence holder, the date the licence was granted).
• A company is treated as a qualifying company for these purposes even if it would only have failed to qualify because the right had not yet been granted, or because it disposed of the rights or licence before the grant.