Income Tax (Earnings and Pensions) Act 2003 section 459

Transfer of intellectual property by controlled company

Section 459 deals with situations where a research institution controls a company and that company transfers intellectual property, ensuring the transfer is treated as coming from the research institution itself.

• Where a research institution controls a company, any transfer of intellectual property by that company is treated as a transfer from the research institution
• Where two or more research institutions jointly control a company, a transfer of intellectual property by that company is treated as a transfer from all of those research institutions
• This rule reflects the common practice of universities using intermediate holding companies to manage intellectual property and establish spin-out companies
• "Control" takes its meaning from sections 450 and 451 of the Corporation Tax Act 2010, which set out detailed tests for determining when a person or persons have control of a company