The IP condition is designed to ensure that income from intellectual property (IP) connected with the UK will not escape the CFC charge as a result of the safe harbour for a trading profits.

IP is:

(a)a patent;

(b)a trade mark;

(c)a registered design;

(d)a copyright;

(e)a design right; or

(f)any licence or other right in relation to anything falling within (a)–(e) above (TIOPA 2010, s. 371VA).

The IP condition will be met unless:

(1)the CFC's assumed total profits (see ¶767-985) include amounts arising from IP held by the CFC (the ‘exploited IP’);

(2)either:

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