[BIM40305] Specific receipts: exclusivity agreements: tax and accounting treatment
The possibility that in certain circumstances a receipt under an exclusivity agreement may have to be repaid does not cause it to be characterised as a loan (see Smart v Lincolnshire Sugar Co Ltd  20 TC 643). The two issues to consider are:
•whether the receipt is on capital or on revenue account
•if revenue, the time at which it should be recognised
Revenue or capital?
Whether a receipt under an exclusivity agreement is revenue or capital, or mixed, depends upon the purpose for which it is paid. For example, see Evans v Wheatley  38 TC 216, CIR v Coia  38 TC 334, McLaren v Needham  39 TC 37 and Walter W Saunders Ltd v Dixon  40 TC 329.