EMI, VCT And Related Reliefs - IP-Based Activities And Investments

There have been two Budget-related changes in this area affecting companies which take advantage of the EMI, VCT, EIS and CVS legislation.

• A welcome change is that corporate groups can now transfer IP to newly-established subsidiary companies so that options over and investments in shares in the parent company still qualify for the reliefs.

• However, an unpublicised and adverse change is that the receipt of IP royalties and licence fees by an acquired company can no longer form the basis of these reliefs being available. VCTs which have set up acquisition vehicles to acquire such companies in the past will no longer be able to receive tax relief when they buy companies in the future.