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Targeted anti-avoidance provisions apply to impose a miscellaneous income tax charge on consideration received for the disposal of a licence by a non-active partner if the partnership trade includes the exploitation of licences and the partner has claimed loss relief in the early years of trading (first four years)¹.

For the purposes of this charge a non-active partner includes a limited partner².

The rules apply if:

1. Ìý

   •ÌýÌýÌýÌý there is a disposal of a licence acquired in carrying on the partnership trade or a disposal of rights to income from the licence under a related agreement³

2. Ìý

   •ÌýÌýÌýÌý the individual receives consideration for the disposal not otherwise subject to income tax or to an exit charge under ITA 2007, s 797 (disposal of film rights, see B5.508)⁴, and

3. Ìý

   •ÌýÌýÌýÌý the individual has claimed sideways loss relief for a qualifying year in respect of their share of a partnership loss derived to any extent from expenditure