Part 9Intellectual property: know-how and patents
Chapter 3Sales of patent rights
Charge to tax
912Charge to tax on profits from sales of patent rights
1
The charge to corporation tax on income applies to profits from sales by a company of the whole or part of any patent rights.
2
Subsection (1) applies in the case of a non-UK resident company if the patent is granted under the laws of the United Kingdom.
3
In this Chapter “patent rights” means the right to do or authorise the doing of anything which, but for the right, would be an infringement of a patent.
913Profits charged under section 912
1
A company's profits from the sale of the whole or part of patent rights are—
a
any capital sum comprised in the proceeds of sale, less
b
the deductible costs.
2
The deductible costs are—
a
the capital cost (if any) of the rights sold, and
b
any incidental expenses incurred by the company in connection with the sale.
3
If—
a
the company acquired the rights sold, or the rights out of which they were granted, by purchase,
b
the company has previously sold part of the purchased rights, and
c
the proceeds of that sale, after deducting any incidental expenses, consisted wholly or partly of a capital sum,
the capital cost is reduced by that sum.
4
References in this Chapter to the capital cost of patent rights are to any capital sum included in any price paid by the company to purchase—
a
the rights, or
b
the rights out of which they were granted.
5
This section needs to be read with sections 924 (relief for expenses: patent income) and 926 (contributions to expenditure).