Briefing

With state funding for higher education under increasing pressure, many institutions are focusing on generating income through commercial activities. One example is the use of spin-out companies to generate revenue through commercial exploitation of intellectual property. This article provides an overview of the charity law and governance considerations that HEIs should bear in mind when putting in place or reviewing spin-out arrangements. 

Please note that this article does not consider tax issues; for example, the Researchers’ Tax Exemption in Chapter 4A, Part 7, ITEPA 2003 or the capacity of a spin-out company to make payments to the HEI via Gift Aid. An HEI considering or reviewing spin-out activities should obtain specialist tax advice to ensure that it minimises the risk of any adverse tax consequences.