The Revenue's Shares Valuation Division has stated that the official view is that section 105(1), Inheritance Tax Act 1984 (business property relief) applies to a business or an interest in a business and this cannot encompass patent royalties. Despite the fact that, for income tax purposes, royalties paid to an inventor rank as earned income, Shares Valuation Division apparently does not regard it as such. The further comment was made that 'it might be different if the individual invented the product, registered the patent and then engaged in the manufacture'.
The Revenue's Shares Valuation Division has stated that the official view is that section 105(1) Inheritance Tax Act 1984 (business property relief) applies to a business or an interest in a business and this cannot encompass patent royalties. Despite the fact that for income tax purposes royalties paid to an inventor rank as earned income Shares Valuation Division apparently does not regard it as such. The further comment was made that 'it might be different if the individual invented the product registered the patent and then engaged in the manufacture'.
Hence on this view business property relief will not be available for patent rights even in the hands of the original inventor of the product concerned.
The present Government seems intent on encouraging entrepreneurs but it seems that inventors for some reason have been overlooked and...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.