Copyright
14/06/1993
Query
Is the sale of copyright subject to Income Tax or Capital Gains Tax?
Decision
The U.K. case of Nethersole v. Withers (28 TC 501) which was concerned with the sale of copyright in a play is relevant. It contains a useful summary of the case law on the point. To apply the decision to a case it would firstly be necessary to decide if the activities of the taxpayer are in the nature of a trade. If so, the payments are liable to Income Tax and there is no consideration for Capital Gains Tax Purposes. If not, they are capital and liable to Capital Gains Tax.
Income Tax
Section 65, Taxes Consolidation Act, 1997
Origin: RLS Division
File ref:IT933036