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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Intellectual Property Rights: image rights: licensing arrangements

A transaction in which “image rights” are alleged to have been transferred to an image rights company (IRC) may take the form of a licensing arrangement, rather than an outright assignment.

The grant of a licence may, depending on the circumstances, represent a part disposal of an asset within Section 21(2)(b) TCGA1992 CG12730 in relation to the licensor, if the creation of the licence represents an interest or right in or over the asset. Alternatively the grant of a licence may be a deemed disposal within Section 22 TCGA CG12980.

Certain types of licence are specifically referred to in CGT legislation as assets - for example, Section 275(h) and (j) TCGA, which deal with the location of assets for CGT purposes CG12420.

You should consider carefully the nature of the licensing arrangement between the parties in order to identify the nature of the asset over which rights have been granted.