Intellectual property (IP) can be a key business asset and covers the following:
- Trade marks
- Good will of a business
Valuing IP can be difficult and is generally considered as the ‘strength of the IP in the marketplace and financial performance of the IP’.
The choice of valuation methodology will vary on a case by case basis depending on the type of IP asset that is being valued. Once the IP has been assigned to the pension, it must be revalued on a regular basis to maintain the integrity of the IP assets.
However, before Dentons will consider IP to be held as a suitable investment within a SIPP or SSAS we will require the following information:
- Background and nature of the business including a market review
- Structure of the business
- Length of time the business has been operating (please note we require the latest 3 years' accounts which will need to demonstrate a successful trading record)
- Financial review including the business turnover
- Area of trading eg UK, EU or worldwide
- Details of key competitors
- Brand strength - what IP the business has and whether it is registered or unregistered
For Dentons to consider IP within a SIPP or SSAS, the business must get an IP valuation from an ISO 10668 company. Companies using this ISO benchmark will ensure their valuation practice is consistent, using reliable procedures and methods for measurement of the brand values.
In addition, Dentons will only allow a maximum of 50% of the your net SIPP or SSAS assets to be used for the IP investment, which must be for a minimum of £100,000. Therefore, clients will effectively require a fund value above £200,000 for Dentons to consider the investment.
If you think your business IP may be a suitable investment to be held in your SIPP or SSAS and you are able to meet the criteria outlined above, please Contact us to discuss this further.