Part 8 Patent allowances
Chapter 5 Supplementary provisions
481 Anti-avoidance: limit on qualifying expenditure
1
In the two cases given below, the amount (if any) by which the capital expenditure incurred by a person (“the buyer”) on the purchase of patent rights exceeds the relevant limit is to be left out of account in determining the buyer’s qualifying expenditure.
2
The first case is where the buyer and the seller are connected with each other.
3
The second case is where it appears that the sole or main benefit which (but for this section) might have been expected to accrue to the parties from—
a
the sale, or
b
transactions of which the sale is one,
was obtaining an allowance under this Part.
4
If the seller is required to bring a disposal value into account under this Part because of the sale, the relevant limit is that disposal value.
5
If subsection (4) does not apply but the seller—
a
receives a capital sum on the sale, and
b
the relevant limit is that sum.
6
If neither subsection (4) nor subsection (5) applies, the relevant limit is whichever of the following is the smallest—
a
the market value of the rights;
b
if the seller incurred capital expenditure on acquiring the rights, the amount of that expenditure;
c
if a person connected with the seller incurred capital expenditure on acquiring the rights, the amount of that expenditure.
482 Sums paid for Crown use etc. treated as paid under licence
1
This section applies if an invention which is the subject of a patent is used by or for the services of—
a
the Crown under sections 55 to 59 of the Patents Act 1977 (c. 37), or
b
the government of a country outside the United Kingdom under corresponding provisions of the law of that country.
2
The use is to be treated as having taken place under a licence.
3
Sums paid in respect of the use are to be treated as having been paid under a licence.
483 Meaning of “income from patents”
For the purposes of this Part a person’s “income from patents” means—
a
royalties or other sums paid in respect of the use of a patent,
b
balancing charges to which the person is liable under this Part, and