Corporation Tax Act 2010 section 357GCZF

Treatment of income in connection with formation of CSA etc.

Section 357GCZF deals with situations where a company receives payments in connection with cost-sharing arrangements involving qualifying intellectual property rights, and how those payments are treated as relevant IP income.

• When a company holding a qualifying IP right or exclusive licence receives a payment for entering into a cost-sharing arrangement, a just and reasonable amount of that payment is treated as relevant IP income.
• When a company already in a cost-sharing arrangement receives a payment from someone joining the arrangement (whether replacing the company or joining alongside it), a just and reasonable amount is treated as relevant IP income, provided any party holds a qualifying IP right or exclusive licence.
• When a company in an existing cost-sharing arrangement receives a payment from another party who gains a greater income share or additional rights relating to the invention, a just and reasonable amount is treated as relevant IP income.
• In all three cases, only a "just and reasonable" proportion of the payment received qualifies as relevant IP income, not necessarily the full amount.