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An inventor personally owns a patent that is licensed to his company, which exploits it. To mitigate personal tax liabilities, it has been suggested the patent be owned by a company
We have been asked to incorporate an inventor’s business. He has registered a patent in his personal name after several years of research and development by his trading company of which he is the 100% shareholder.
His trading company has the exclusive worldwide right to exploit his patent and pays our client an annual sum for this benefit. This is exposing our client to very high income tax charges.
Our client has a number of new ideas which may result in new patents so he has asked us to incorporate his patent business to avoid even higher income tax charges as new ones are developed.
Our client’s trading company is owned by a non-trading holding company (Holdco). Our client wishes to create a new subsidiary (under the holding company) which will ring fence his patent business and reduce his income tax exposure.
He wishes to do this...
