Corporation Tax Act 2009 (c. 4)

Part 9 U.K. Intellectual property: know-how and patents

Chapter 3 U.K. Sales of patent rights

Spreading of charge to tax U.K.

914 UK resident companies: proceeds of sale not received in instalments U.K.

(1) This section applies if a company liable for tax under section 912—

(a) is UK resident, and

(b) does not receive the proceeds of sale in instalments.

(2) The appropriate fraction of the amount chargeable is taxed—

(a) in the accounting period in which the company receives the proceeds of sale (“the period of receipt”), and

(b) in successive accounting periods, until the expiry of the 6-year period beginning at the start of the period of receipt.

(3) The appropriate fraction is the same fraction of the amount chargeable as the accounting period in question is of 6 years (or, in the last period, such smaller fraction of that amount as has not already been taxed).

(4) The company may elect that the whole of the amount chargeable is to be taxed instead in the period of receipt.

(5) An election under subsection (4) must be made within the two-year period beginning at the end of the period of receipt.