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Stamp Duty exemptions on Agreements transferring Intellectual Property Rights

Section 74 of the Finance Act 2004 introduced an important exemption from Stamp Duty for instruments effecting the transfer of and contracts for the sale intellectual property. Prior to 1st April 2004 these instruments attracted stamp duty at rates up to 9%.

Intellectual property (as defined in section 101(1) of the Finance Act 2004) is any;

patent,
trademark,
copyright,
registered design,
design right,
invention,
domain name,
supplementary protection certificate or,
plant breeder's rights.

The exemption applies to any instrument effecting the sale, transfer or other disposition of intellectual property, such as a contract for sale, a licence or a mortgage executed on or after 1st April 2004.

Goodwill to the extent that it is directly attributable to the intellectual property being transferred is covered by the exemption but it should be noted that the exemption does not extend to any element of goodwill that is attributable to a business.

Instruments that deal with the transfer of property other than exempted intellectual property will have to apportion the consideration on a just and equitable basis as between the intellectual property and the other property.