Earlier this summer, in Trustees of the Mrs PL Travers Will Trust v HMRC [2013] UKFTT 436 (TC), 14 August 2013, a First-tier Tribunal in the UK found that whether copyright royalties payable to trustees were taxable as
capital or income depended on an analysis of copyright ownership in the light
of trust law principles. The Tribunal also considered what constituted accumulation
of income, where royalties were being exploited.
Curiously, in reaching its decision the tribunal
judges had to refer to a line of Scottish cases relating to
mineral rights. This reflects the fact that there are not many cases on the tax and
trust treatment of copyright. This decision is therefore likely to be a useful
reference point for trustees who are holding copyright and for the executors of literary
estates as well as their advisers.
Cultural note: the P. L. Travers in this case is not as well known as her famous literary creation, this being none other than Mary Poppins.
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