Intellectual property (IP) and goodwill are the life blood of a modern growing enterprise. Think of the business names, logos, and trademarks which are avidly protected by international corporations because they are the back bone of their enterprise value. It is easy to confuse the value of IP and goodwill when a business is sold. This paper identifies the essence of these assets and the taxation consequences which follow when dealing with them.
This paper covers:
- identifying goodwill and distinguishing it from IP
- the source of goodwill in intangible assets
- structures for holding IP
- interplay with R&D concessions
- Capital gains tax issues: determining the appropriate cost base, termination value and the interaction with Div 40
- goodwill licensing and franchisees’ goodwill (Just Jeans issues)
- creation of IP outside of Australia (original copyright)
- TR 2008/7 on royalty withholding tax and assignment of copyright.