Budget 2001: The Budget & Business: Tax Rules: Draft Bill to Cover Intellectual Property, Goodwill and Intangible Assets
McIntosh, Bill, The Independent (London, England)
THE GOVERNMENT moved a step closer yesterday to fulfilling its undertaking, announced in the 2000 Budget, to reform the taxation of intellectual property, goodwill and intangible assets.
Businesses generally welcomed the launch of further consultation into the issue and the publication of draft legislation covering core elements of the proposed new regime.
The tax treatment of intellectual property and goodwill have become more important to companies with the development of a knowledge-based, post- industrial economy. The overhaul of tax rules affecting these areas is aimed at promoting innovation and encouraging large companies to increase research and development investment in the UK.
The new rules would extend tax breaks to virtually the full range of intangible assets and purchased goodwill by giving relief against current income based on the amortisation in companies' accounts.
The Government is thought to be committed to modernising the tax treatment of goodwill and other intangibles as soon as practicable, but there was some disappointment in the City that the Chancellor is still consulting on the issue. However, Gordon Brown has recognised the need for reinvestment relief to alleviate the potential cost to vendors of selling intangible assets, one of the main problems with the first set of proposals. …