Research Institution Spin-out Relief
06 March 2019
Where certain conditions are met, spin-out relief prevents an income tax and NIC charge arising for academics and researchers acquiring shares in a start-up or spin-out company. The intellectual property is transferred into the company and it creates or increases the value of the shares.
What is a ‘spin-out’ company?
Universities and other Research Institutions (RIs) which own Intellectual Property (IP) often develop that IP further through companies created in association with the academics and researchers from the institution (Researchers) who worked on the project. These are commonly referred to as spin-out or spin-off companies.
Most RIs have in place an IP-sharing policy that acknowledges the Researcher’s contribution to the IP by sharing the benefit of it with the Researcher through a share of royalties or, where the IP is developed through a spin-out into which IP has been transferred, shares in that company.