Consideration received for the disposal of know-how is charged to corporation tax under CTA 2009, Pt. 9 on the company who receives the consideration, except where otherwise chargeable (CTA 2009, s. 908).

Know-how is a commodity which, when ‘sold’, is nevertheless retained by the vendor. The charge therefore extends to consideration for the disposal itself and for any undertaking connected to that disposal, whether legally binding or not, which restricts a persons activities in any way, e.g. any agreement whereby the vendor undertakes not to make use of the know-how following the disposal.

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