»Ê¹ÚÌåÓýapp

Outline of provisions

»Ê¹ÚÌåÓýapp new rules will apply when the following four conditions are satisfied (ITEPA03/S451 (1)):

• there must be an agreement to transfer Intellectual Property (IP) from one or more Research Institutions (RIs) to a spin-out company;
• a person (“the Researcherâ€�) must acquire shares in the Spin-out company either before the IP transfer agreement is made or within 183 days thereafter;
• the right or opportunity to acquire the shares must have been available by reason of the Researcher’s employment with the spin-out company or with any of the RIs; and
• the Researcher must be involved in research in relation to the IP that is the subject of the IP transfer agreement.

»Ê¹ÚÌåÓýapp new measure is directly targeted at the researcher’s position when IP is transferred into a spin-out company from their employer. It does not affect the position of the RI itself, except that there will be no employer’s NICs to pay on the transfer of the IP. Nor will it affect the RI’s position for Capital Gains Tax (CGT) or Corporation Tax (CT). »Ê¹ÚÌåÓýapp spin-out company, and researchersâ€� shares, remain within the scope of Part 7 of ITEPA in all other respects.

In particular, where shares in a spin-out are acquired by a researcher after other events (such as introduction of funding or business development) have increased the value of the company, there could still be a residual charge to Income Tax and NICs based on shares acquired at less than market value, even though the effect on value of the IP is being ignored

»Ê¹ÚÌåÓýapp relief covers only the transfer of IP from the RI. It does not cover the transfer ofany other item of value, such as income from research contracts.