Section 908 | Charge to tax on profits from disposals of know-how

(1)The charge to corporation tax on income applies to profits arising where consideration is received by a company—

(a)for the disposal of know-how, or

(b)for giving, or wholly or partly fulfilling, an undertaking which—

(i)is given in connection with a disposal of know-how, and

(ii)restricts or is designed to restrict any person's activities in any way.

(2)For the purposes of subsection (1)(b), it does not matter whether or not the undertaking is legally enforceable.

(3)Subsection (1) is subject to the exceptions in section 909.

(4)In this Chapter “know-how” means any industrial information or techniques likely to assist in—

(a)manufacturing or processing goods or materials,

(b)working a source of mineral deposits (including searching for, discovering or testing mineral deposits or obtaining access to them), or

(c)carrying out any agricultural, forestry or fishing operations.

(5)In subsection (4)—

(a)“mineral deposits” includes any natural deposits capable of being lifted or extracted from the earth and for this purpose geothermal energy is treated as a natural deposit, and

(b)“source of mineral deposits” includes a mine, an oil well and a source of geothermal energy.