Corporation Tax Act 2010 section 357GCZA

Qualifying IP right held by another party to CSA

Section 357GCZA sets out how a company in a cost-sharing arrangement (CSA) is treated when another party to the arrangement holds a qualifying IP right, and determines whether that right is classified as a new or old qualifying IP right for the company.

• Where another party to a CSA holds a qualifying IP right and the company does not hold an exclusive licence over it, the company is treated as if it held the right itself.
• The right is treated as a new qualifying IP right (subject to the R&D fraction requirement) if the company or the other party joined the CSA on or after 1 April 2017, or the right is already a new qualifying IP right for its holder.
• An exception applies where the company previously held a grandfathered exclusive licence over the right immediately before joining the CSA — in that case the right is not automatically treated as new.
• If the right does not qualify as a new qualifying IP right under these rules, it is treated as an old qualifying IP right for the company.