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HMRC internal manual

Corporate Intangibles Research and Development Manual

Core computational rules: deductible debits: general matters and adjustments for tax purposes: deferral of deduction: payment of royalties to related party delayed


This rule applies where a royalty:

  • is payable by a company to or for the benefit of a ‘related party’ (see CIRD45105 onwards)
  • is not paid within twelve months of the end of the period of account in which it is charged against profits
  • is not at some time fully brought into account under Part 8 by the recipient

In those circumstances the royalty only counts as a deductible debit when it is actually paid. See CIRD11710 for the definition of royalties.

This rule is modelled on the similar provision in the loan relationships rules (CTA09/PART8/S373) concerned with late paid interest (see CFM35810).