A relaxation for companies that devise their own software.
The EMI legislation contains certain "excluded activities" which can prevent a company qualifying. One such activity is obtaining royalties or licence fees from intangible assets (such as software).
A company has already been able to qualify for EMI if it created the asset (e.g. devised the software) but not where it bought the asset (or a company or business that owns it). The changes announced are to rectify a trap in which companies that created the software subsequently transferred its ownership within the group. A technical defect in the legislation meant the transfer caused the parent company not to qualify for EMI. This will be rectified by the Finance Act 2007 with effect from 6 April 2007.
If you would like further information on this issue, please contact Guy Abbiss
, Tracey Horne
or Colin Kendon