Section 455 | Excluded expenditure

(1)Expenditure on the acquisition of know-how is not qualifying expenditure to the extent that it is otherwise deducted for tax purposes.

(2)Expenditure on the acquisition of know-how is not qualifying expenditure if—

(a)the buyer is a body of persons over whom the seller has control,

(b)the seller is a body of persons over whom the buyer has control, or

(c)the buyer and the seller are both bodies of persons and another person has control over both of them.

(3)In subsection (2) “body of persons” includes a partnership.

(4)Expenditure on the acquisition of know-how is not qualifying expenditure if it is treated as a payment for goodwill under section 194(3) of ITTOIA 2005 or under section 178(3) of CTA 2009 (consideration for know-how on disposal of trade to be treated as payment for goodwill, unless parties otherwise elect etc.).^F1F2