For the purposes mentioned below, the market value of the shares (or interest in shares) on acquisition is calculated disregarding the effect on that market value of the intellectual property agreement and any transfer of intellectual property pursuant to it.

(ITEPA 2003, s. 452)

In most cases, what this will mean is that a newly constituted research company has a market value for these purposes that is no more than the amount of any cash subscribed for the shares.

This rule applies for the following purposes:

in determining earnings from the employment under the basic charging provision in ITEPA Part 3, Ch 1 (see ¶405-040);

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