Readers' forum : Licence fee

For the past ten years my client has granted a licence to his limited company to use a trade mark name. In consideration the company has paid the client £50 000 a year. This has been declared on his personal return. I estimate that the trade mark has a value of about £500 000 – ten times the annual fee.

If the client sells the trade mark to the company could he claim entrepreneurs’ relief against the gain on this transaction? Further could the company claim capital allowances or any other tax relief against the expenditure of £500 000.

Are there any other considerations that should be taken into account?

Query 19 006 – Peter.

Reply by Bramble

I would recommend Peter refers to the replies to the very similar ‘Trademark transfer’ query (18 937) published on 9 March 2017 and on www.taxation.co.uk. Without reiterating...