Section 357BIA | Certain amounts not to be deducted from sub-streams at Step 4 of section 357BF ^F1F2

(1)This section applies where a company enters into an arrangement with a person under which—

(a)the person assigns to the company a qualifying IP right or grants or transfers to the company an exclusive licence in respect of a qualifying IP right, and

(b)the company makes to the person an income-related payment.

(2)A payment is an “income-related payment” for the purposes of subsection (1) if—

(a)the obligation to make the payment arises under the arrangement by reason of the amount of income the company has accrued which is properly attributable to the right or licence, or

(b)the amount of the payment is determined under the arrangement by reference to the amount of income the company has accrued which is so attributable.

(3)If the amount of the income-related payment is allocated to a relevant IP income sub-stream at Step 3 of section 357BF(2), the amount is not to be deducted from the sub-stream at Step 4 of section 357BF(2) unless the payment will not affect the R&D fraction for the sub-stream.”