TaxPersonal TaxTax relief on intellectual property unveiled

Tax relief on intellectual property unveiled

Businesses are to get tax relief for purchased goodwill and other intangible assets under changes published on Budget day which will bring the UK into line with its European trading partners and the US.

A technical note issued by the Inland Revenue gave details of the new tax regime, which will be introduced in the Finance Bill, which follows two years of consultation with the business world.

In his speech, chancellor Gordon Brown said the new regime would ‘meet the needs of a more knowledge based economy.’

The term intellectual property covers such things as brands, customer lists, relationships with suppliers, patents and company names.

Lindsay Dodsworth, a partner at Ernst & Young, said: ‘We welcome the proposals, particularly to allow relief for goodwill, which will make the UK more competitive when it comes to attracting investment, and bring it into line with our major trading partners.’

But she warned that the ‘devil would be in the detail’ of the draft legislation and that transitional rules were likely to be complex.

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