Income Tax Act 2007 section 84

Excluded activities: receipt of royalties and licence fees

Section 84 modifies the rules on excluded activities relating to royalties and licence fees for the purpose of determining whether shares or securities issued before 6 April 2000 form part of a venture capital trust's qualifying holdings.

• For shares or securities issued before 6 April 2000, a modified version of section 306 applies when assessing whether a trade constitutes an excluded activity due to receiving royalties or licence fees
• A trade is not treated as an excluded activity merely because it consists to a substantial extent of receiving royalties or licence fees, provided certain conditions relating to film production or research and development are satisfied
• Film production companies qualify if they produce (or produce and distribute) films made since the relevant holding was issued, and all royalties and licence fees relate to those films, their sound recordings, or other products arising from them
• Research and development companies qualify if all royalties and licence fees they receive are attributable to research and development that the company itself has carried out