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HMRC internal manual

Employment Related Securities Manual

University Spin-outs

Later transfers of IP

The legislation is framed in terms of the agreement for the transfer, so if the agreement provides for later developments in IP (sometimes called “improvement IP”) to go to the spin-out then these will also be covered.

However, if unconnected IP is transferred into the spin-out later, then although relief may be available for this element if other criteria are satisfied, an Income Tax charge could arise if additional shares were issued, the value of which had been enhanced by other elements, e.g. previous funding injections.