Section 908 — Corporation Tax Act 2009: Charge to tax on profits from disposals of know-how

Charge to tax on profits from disposals of know-how 908 1 The charge to corporation tax on income applies to profits arising where consideration is received by a company—

a for the disposal of know-how, or b for giving, or wholly or partly fulfilling, an undertaking which—

i is given in connection with a disposal of know-how, and ii restricts or is designed to restrict any person's activities in any way.

2 For the purposes of subsection (1)(b), it does not matter whether or not the undertaking is legally enforceable.

3 Subsection (1) is subject to the exceptions in section 909.

4 In this Chapter “ know-how ” means any industrial information or techniques likely to assist in—

a manufacturing or processing goods or materials, b working a source of mineral deposits (including searching for, discovering or testing mineral deposits or obtaining access to them), or c carrying out any agricultural, forestry or fishing operations.

5 In subsection (4)—

a “ mineral deposits ” includes any natural deposits capable of being lifted or extracted from the earth and for this purpose geothermal energy is treated as a natural deposit, and b “ source of mineral deposits ” includes a mine, an oil well and a source of geothermal energy.