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Tax consequences of disposing of intellectual property


The purpose of this article is to provide a brief introduction to the taxation concepts and issues that arise when disposing of intellectual property, particularly “know-how” (including trade secrets and confidential information), but also such other items as film expenditure. The article explores the relevant tax issues, including the fundamental calculation of the taxable gain or loss, the tax category into which the asset falls (noting that certain types of intellectual property fall outside traditional tax categories), tax costs deductible by the taxpayer when disposing of the asset, the possible application of the concessional research and development regime, and the possibility of selling the entity which holds the intellectual property and the consequent possible application of the tax cost setting rules in the consolidation regime.

Finally, the article examines certain types of intellectual property, being certain film expenditure, which provide the taxpayer with another avenue to claim tax deductions.

Author profile

Daniel Sydes ATI
Daniel is a Director at Greenwoods & Herbert Smith Freehills Pty Limited, with over 15 years of tax adviser experience. Daniel advises on a wide range of corporate tax issues, particularly within the property construction and development, property funds management, and media sectors. One of Daniel's key areas of expertise is the MIT, AMIT and clean building MIT regimes, and the various issues that arise in property development transactions. - Current at 22 November 2017
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